No time right now?
In order to be able to trade stocks even faster than the competition, some high-frequency traders in the USA are now relying on a technology that has been known since the 1990s: hollow fiber optic cables.
In the controversial high-frequency trade, every nanosecond is important. Industry representatives gain a head start by placing their computers as close as possible to the central computers of the stock exchanges and programming bots. Some US high-frequency traders are now using another option to increase the transmission rate and reduce the latency. You are relying on a new generation of hollow fiber optic cables.
Air instead of glass for faster conduction
The considerations for this type of fiber optic cable go back to the 1990s. Instead of having a solid core made of glass, as is usual with conventional fiber optic cables, the new fiber optic cables are hollow on the inside. They just have dozen of parallel and air-filled ducts that are narrower than a human hair like that Wall Street Journal reports. Because the light used to transmit the information travels faster in air than in glass, the transmission in the hollow lines should be minimally faster.
However, the effect decreases the longer the route used for transmission becomes. Via the short transmission paths used by the high-frequency traders, it should be a matter of a few hundred nanoseconds, i.e. billionths of a second, that can be knocked out with a hollow fiber optic cable. That seems to be worth the effort in this business. Especially since manufacturing costs have fallen significantly in recent years and the efficiency of the technology has increased, according to the Wall Street Journal.
Can also be used outside of stock trading
Apparently that is particularly active in the development of hollow fiber optic cables OFS Optics company, a subsidiary of the Japanese concern Furukawa Electric. According to their own information, their solution is already being used by several companies in the field of high-frequency trading. Other providers also see the application of the fast transmission paths outside of stock trading, for example for telecommunications connections or 5G networks.