IBM teams with Rapid Addition for ultra-low latency
High frequency trading specialist Rapid Addition has partnered with IBM to provide an ultra-low latency service for financial firms that are very sensitive to speed.
Rapid Addition’s Cheetah FIX engine will be integrated with IBM’s WebSphere MQ Low Latency technology to ensure the highest possible speeds through FIX messages.
“We are always looking to build on our portfolio of technology partners and IBM is one of the biggest names,” said Kevin Houstoun, chairman at Rapid Addition. “Our work with the firm will continue on into future projects to improve performance of the joint offering and on other innovative services in the pipeline.”
Using Rapid Addition’s Binary FIX message format as the IBM WMQ LLM message payload allowed specific optimisation of the Cheetah FIX engine interface for transmitting and receiving messages over the IBM LLM message bus, it also minimises latency.
So-called ‘cheetah-traders’ often operate business models that rely on high-speed trading strategies, such as arbitraging tiny price differences between stocks listed on different venues that may only exist for a fraction of a second.
HFT is controversial in equity markets because many longer-term investors believe that they are being disadvantaged by the practice. However, global exchanges have been keen to attract HFT participants to their markets because HFTs typically boost trading volumes and therefore increase the exchange’s revenue from trading fees.