Rooftop Lasers Are The Next Big Thing For High-Speed Trading

Rooftop Lasers Are The Next Big Thing For High-Speed Trading

Eventually, they could end up on your roof, beaming trading data across the sky: Lasers, originally developed by the military, that are now being co-opted by high-frequency traders looking for even faster ways to do business.

These beams are faster than fibre optics, faster than microwaves, faster even then the millimetre-waves that most high-speed traders use today. They’re the last resort for companies trying to out-trade their competitors by slivers of milliseconds — a technical competition that The Wall Street Journal today describes as a “race to zero“.

The laser engineers in question are called AOptix Technologies Inc — a Silicon Valley company that got its start building laser tech for the military, which uses it to beam information between jets and command centres — and Anova, a Chicago communications company that builds these networks:

The technology traced back to the 1990s, when two scientists designed a method to gather images from outer space that corrected for atmospheric distortions. They developed technology for telescopes with flexible mirrors that could adjust thousands of times a second.

But Wall Street companies are interested in the technology too — and the word is spreading. Right now, workers are installing lasers atop tall office and residential buildings in New Jersey to link two NYSE data centres, spread 35 miles apart. Other companies plan to install similar networks.

Imagine cities, and even small towns, where rooftops are dotted with futuristic white pods, each beaming trading data across the country at the speed of light — a shadow information network that’s only used by two of the country’s most powerful institutions: The military and Wall Street. [Wall Street Journal]