Is the arms race ending as HFT firms merge technologies?


Last month KCG Holdings (the Knight/Getco combination) announced a joint venture with World Class Wireless, a technology company closely related to Jump Trading, to pool their array of microwave towers worldwide and jointly operate them.


Microwave towers are used by HFT firms to be faster than fiberoptic networks to connect them to the various exchanges.

According to the article in Traders Magazine, it signals a shift in the way HFT firms operate and compete. Over the years, these firms were involved in a technology race to be the fasted firm out there. Huge efforts and huge costs were made. Now  the end of this race appears in sight and the costs have come under scrutiny. 

According to the magazine it is a sign of a maturing market. Perhaps the local (and more modest) Dutch players can take a page from this scenario and see where they can save costs by combining their technologies. Click here for the full article.