Network communications between systems in HFT
When designers build a network for HFT systems, they focus on the different modes of communication. Because microseconds matter, they must consider the benefits of using a microwave network or a Cisco switch over another switch.
The innovation in networking has the potential to make enormous differences in trading.
The following diagram represents an abstract model of a network. When two devices communicate, they need a medium to have the data transferred. They communicate through a physical connection connected to a network device such as a switch. The switch is in charge of moving the packet from one part of the network to the other, where we can find the recipient of the data the sender sends:
Figure 5.3 – Abstract model of a network
Every network component is essential for network latency. These are all sources of latency:
- The NIC converts the signal from a computer to a network and vice...
