TRADING IN THE CLOUDS…


Is the Silver Lining in the Clouds…there?


A little while ago, two similar announcements took place, one from NASDAQ and one from the CME, that may have long lasting implications for anyone trading…well… anything! I’d like to discuss these announcements…and what they may mean.


NASDAQ announced that it planned to move away from having its own servers and on-premise systems and towards a cloud-based solution provided by Amazon Web Services, a Cloud based service. Meanwhile the CME plans to move core trading systems to Alphabet’s, Google Cloud system. This could make what has amounted to hundreds of millions of dollars of spending by HFT’s and others…redundant!


Up until now, sophisticated customers of these exchanges have sought to co- locate their own equipment as close as possible to the servers of the exchanges so as to minimise the response time and latency that are at the core business model of HFT’s. This idea and process is now being turned on its head as Cloud computing relies on rented access to shared computing infrastructure that is, most importantly, likely to be at multiple locations. This will have an impact on the datacentres where current co-location is taking place, such as LD4 & 5, NY4 & 5 plus others.


CO-LOCATION…IS BEING TURNED ON ITS HEAD!


24 | ADMISI - The Ghost In The Machine | Q4 Edition 2021


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