Monday, July 2, 2018 [Tweets] [Favorites]

Time Synchronized to the Nanosecond

John Markoff (via Matt Levine):

System engineers at Nasdaq, the New York-based stock exchange, recently began testing an algorithm and software that they hope can synchronize a giant network of computers with that nanosecond precision. They say they have built a prototype, and are in the process of deploying a bigger version.

[…]

Because the orders are placed from locations around the world, they frequently arrive at the exchange’s computers out of sequence. The new system allows each computer to time stamp an order when it takes place.

As a result, the trades can be sorted and executed in correct sequence. In a networked marketplace, this precision is necessary not only to prevent illicit trading on advance information known as “front-running,” but also to ensure the fair placement of orders.

[…]

Because software and data are no longer in the same place, correctly calculating the order of the events that may be separated by feet or miles has become the dominant factor in the speed with which data can be processed.

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