The passion for high-speed trading

The passion for high-speed trading

With the launch of a new ultra-low-latency fibre-optic route between London and Frankfurt announced this month, Level 3 Communications is continuing the industry’s battle to woo the finance sector.

Level 3 has a good record in this market, supporting nine of the top 10 banks in the world, and four of the top five financial exchanges. But the carrier is certainly not the only major player to be engaged in a charm offensive for this cash-rich vertical on this particular connection. Within the last few months, Capacity has reported on upgraded routes between London and Frankfurt for euNetworks, Hibernia Atlantic, Abovenet and Reliance Globalcom. The race is clearly on to lower latency in order to attract business from banks, hedge funds, brokers and other financial services institutions. But while the financial vertical is notoriously driven by the need for faster connections, it does make you question how much capacity the financial industry can actually absorb. Is it really enough to support so much investment from so many players?

Richard Irving recently addressed this issue in May in his feature ‘The Race to Zero’, where he examined the real issues impacting the drive to ever lower latency – check it out online at if you missed it. In order to shave one microsecond off the latency, a provider needs to shorten the fibre cable by 100 metres.

With physical limitations such as this to conquer, not to mention the rather more obstinate limit of the speed of light, there must come a point – theoretical or otherwise – where no further improvements are possible. But will the limitations of the market strike before the limitations of physics? In a crowded market which demands continual investment for microscopic, yet vital, improvements, is it feasible that so many carriers can continue to compete? We will, I am sure, all watch developments in this demanding vertical with interest.

Angela Partington, Editor

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