The Impact of High-Speed Networks on HFT Performance

The Impact of High-Speed Networks on HFT Performance

This paper provides an in-depth examination of the critical role that high-speed networks play in the operations of high-frequency trading (HFT) firms. High-speed networks, characterized by their low latency and high bandwidth, facilitate the rapid, efficient transmission of massive quantities of data, a capability that is vital to the success of HFT strategies. We explore the core infrastructure that enables high-speed trading, from high-performance servers and switches to network interface cards and time synchronization devices. Additionally, we delve into the specifics of low-latency switches and multicast networks, discussing their advantages, challenges, and their application in an HFT context. An overview of emerging technologies and trends such as artificial intelligence, machine learning, 5G networks, quantum computing, and regulatory changes that could potentially shape the future of high-frequency trading networks is also presented. This paper serves as a comprehensive reference point for understanding and evaluating the impact and future scope of high-speed networks in high-frequency trading.