STAC speaks on key technologies for high performance

Conclusion: latency investment is not optional but innovation will keep costs from ballooning. Peter Lankford, Director of STAC and President of tbdCorp, joined two sell-side firms and a hedge fund on a panel at the Wall Street Journal/World Research Group's 2nd annual Managing Market Data Conference. The session, entitled "Exploiting New Technologies to Master the Trends in Real-Time Market Data" explored the business potential of innovations in datafeeds, processors, operating systems, networks, event-processing middleware, and hardware acceleration. Among the topics was a dialog between Lankford and Paul Famighetti, Director of Equities Trading at RGM Advisors, about whether shrinking margins in liquid securities would shift investment away from low-latency technologies. The two speakers agreed that minimizing latency will remain a key defensive requirement for anyone trading in a highly automated market, even if latency arbitrage becomes a less lucrative offensive strategy; and this means that no firm can afford to stop investing. Lankford and Famighetti acknowledged that there was some risk that the capital investment required for effective automated trading could grow to a point that would edge smaller firms out of the market. However, they both expressed the view that technological innovation was driving costs downward at a fast enough rate that such an outcome was unlikely in the near term.