In today’s ultra-competitive high frequency trading markets, speed is everything, and wireless technologies, and specifically microwave networking, have recently been recognized as a faster alternative to optical transport for ultra-low latency financial applications. Provided the microwave network is designed and built properly, it can deliver a significant speed advantage over fiber for high frequency trading applications between distant cities such as Chicago and New York.
Microwave technology has been around since the 1940s and 1950s, but today’s microwave is nothing like the original. Initial concerns about reliability and susceptibility to weather have been essentially eliminated in today’s microwave products, which use digital transport. Today, microwave technology is trusted to connect more than 50 percent of the cellular base stations around the world, and it will play an increasingly important role as new 4G LTE mobile services roll out.
Microwave can deliver lower end-to-end latency than fiber because it takes a more direct line between the two ends of the network. Also, microwave signals travel at the speed of light through air, rather than over fiber, which can attenuate signals.
So when considering microwave for a High Frequency Trading network, how does one ensure the lowest latency, and what’s involved in designing and deploying such a network?
Achieving Low End-to-End Latency
There are many factors that influence end-to-end latency in a microwave network:
• Route selection: Minimizing the overall distance between the two end exchanges is one of the greatest contributors to reducing the end-to-end latency. The selection of the optimal route will have to consider whether existing infrastructure will comply with network design objectives, or if construction of new tower sites is justified to reduce the overall distance.
• Reducing the number of hops: Each microwave-to-microwave link is a hop. As more hops introduce more processing latency and noise to the network, decreasing the number of hops is a great contributor to reducing the end-to-end latency. The number of hops will depend directly on the maximum distance that can be achieved with a particular microwave equipment and antenna combination in each hop. A balance must be struck between the total number of hops and a reliability objective that will ensure that the network is available when needed.
• Using repeater technology: Rather than using a microwave radio at each hop, one innovation is the use of repeaters, which pass the connection directly from node to node, eliminating the digital processing latency in a normal radio.
Network Design The network designer must plan a route that minimizes the overall distance, but also takes into account different factors such as available frequencies in the area, coordination with existing networks, and the existence of suitable infrastructure such as telecommunication towers.
Possible equipment and antenna configurations will be used within candidate routes (employing software simulations) to weigh the impact of different configurations on the end-to-end latency and reliability of the network. These simulations need to consider the effect of environmental conditions such as objects in the line of sight.
Additional factors to be considered during the design phase include the available bandwidth, and whether this bandwidth is sufficient to meet the capacity requirement. Balancing all these factors and obtaining a suitable design is a complex process that requires a partner with the necessary engineering know-how to navigate through a series of obstacles in order to provide a reliable network with a competitive edge.
In deploying the microwave network, time to market is often a key consideration, so companies must use a planned and systematic approach that minimizes risks and validates all assumptions made during the design phase. The steps required during the deployment phase include site surveys, frequency coordination and licensing, site construction, installation, and testing and commissioning.
Properly designed and deployed, low-latency microwave networks can help high frequency trading operations win the battle for speed. By addressing the above considerations, low-latency microwave can be a reality.
—Travis Mitchell is Director Low Latency Business Development at Aviat Networks.