EWS A High-Frequency Trading Firm Is Hiring Technicians — but They Can’t Be Afraid of Heights By Samuel Agini, Financial News Updated May 16, 2019 3:16 p.m. ET Order Reprints Print Article Photograph by Fox Photos/Getty Images Text size High-speed trading firm Jump Trading is on the hunt for technicians with a head for heights as it tries to shave all-important milliseconds off the time it takes to execute a securities trade. Chicago-based Jump wants field engineers to help it repair and maintain the telecommunication towers it uses to transmit buy and sell orders at lightning-fast speeds when trading across financial markets, according to job listings on its website. Candidates must be able to climb up to 1,000 feet—though the firm says ascending to between 150 and 400 feet will be a more typical requirement—be strong enough to lift loads of up to 1,500 pounds with hoists and winches, and mount dishes while suspended in a harness. The job listings underline the arms race for speed in financial markets. High-frequency traders like Jump invest in microwave networks to help reduce the time it takes to execute a trade, thus giving them an edge over rivals in the markets. These networks offer faster connections than fiber-optic cables as they allow data to travel through the air. However, they must be transmitted in straight lines from great heights to avoid obstacles, which can include mountain ranges and bad weather. Read our recent cover story: 7 Dividend Stocks for Volatile Times Ahead The towers used to transmit the signals have caused controversy. In the U.K., local residents have clashed with trading firms’ plans to build these structures specifically for transmitting microwaves. In January 2017, Dover District Council blocked plans by U.S. high-speed traders to build towers in rural Kent. DRW Trading’s Vigilant Global and Jump-KCG joint venture, New Line Networks, wanted to reduce trading times in London and continental Europe. EDITOR'S CHOICE The Odds That the Federal Reserve Will Cut Interest Rates Just Got Higher Europe Will Lose the U.S.-China Trade War. How Investors Can Win. Want to Know Where the Market is Going? Watch Apple Stock. Jump wants its engineers to work on towers close to Chicago, as well as in northwest Indiana and eastern Pennsylvania. “Minimal” time could also be spent in the U.K. This article originally appeared on Financial News. Comments? E-mail us at editors@barrons.com
but what about the distance from the trader's computer to the tower? shouldn't they be sitting AT the top of the tower to ensure the fastest transmission?
Yes, but light/microwaves are pretty fast, 1Metre every 0.000000003 of a second. Normal internet is at best 0.040 area. 100Km's gets you a ping of 0.0003 much faster than normal broadband.
All of this is really great but can anyone detail how this makes a trading difference. I would think this has to do with market orders vs limit orders but perhaps I am wrong. Any example of how this type of trading has an advantage over regular limit order would be appreciated.
they all run the same algo and feed off anybody who leaves the orders out there vulnerable to e.g. some news either good or bad. what I don't understand is why not just co-locate... if the next door is taken, get the next door to the next door.
It's due to market microstructure; your limit order will sit for (what in comparison is an) eternity on a given price level, during which HFTs can make a lot of trades. In particular, HFT algos can use your order as "insurance" to make for them great R/R bets. A concrete example: If you have a buy limit order at 10.00, they can attempt to place their own limit to buy at 10.01. They get filled first, and then two things can happen: If price moves higher they benefit (you didn't get filled so you get no benefit). If 10.01 gets exhausted, they can immediately exit at 10.00 because that's where your limit order is resting. You're now filled with a good chance of price heading lower. Congratulations. Shaving off latency just means HFTs can execute this and other strategies even faster to compete against each other.