Equinix a majo r publicly traded ixp and co lo catio

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Unformatted text preview: A.’s,” New Yo rk Times, August 18, 2006. There are many names f o r this auto mated, data-driven f ro ntier o f f inance— algo rithmic trading, black-bo x trading, o r high-f requency trading. And while f irms specializing in auto mated, high-f requency trading represent o nly abo ut 2 percent o f the trading f irms o perating in the United States, they acco unt f o r abo ut three quarters o f all U.S. equity trading vo lume.R. Iati, “The Real Sto ry o f Trading So f tware Espio nage,” Adv anced Trading, July 10, 2 0 0 9. P ro grammers lie at the heart o f mo dern f inance. “A geek who writes co de—tho se guys are no w the valuable guys” says the f o rmer head o f markets systems at Fidelity Investments, and that rare breed o f to p pro grammer can make “tens o f millio ns o f do llars” develo ping these systems.A. Berenso n, “Arrest Over So f tware Illuminates Wall St. Secret,” New Yo rk Times, August 23, 2009. Such systems leverage data mining and o ther mo del-building techniques to crunch massive vo lumes o f data and disco ver explo itable market patterns. Mo dels are then run against real-time data and executed the instant a trading o ppo rtunity is detected. (Fo r mo re details o n ho w data is gathered and mo dels are built, see Chapter 11 "The Data Asset: Databases, Business Intelligence, and Co mpetitive Advantage".) Winning with these systems means being quick—very quick. Suf f er delay (what techies call latency) and yo u may have missed yo ur o ppo rtunity to po unce o n a signal o r market imperf ectio n. To cut latency, many trading f irms are mo ving their servers o ut o f their o wn data centers and into colocat ion f acilit y. These f acilities act as sto rage places where a f irm’s servers get superf ast co nnectio ns as clo se to the actio n as po ssible. And by renting space in a “co lo ,” a f irm gets so meo ne else to manage the electrical and co o ling issues, o f ten pro viding mo re ro bust po wer backup and lo wer energy co sts than a f irm might get o n its o wn. Equinix, a majo r publicly t...
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This document was uploaded on 01/31/2014.

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