HFT firms explore submersion cooling for added efficiency
High-frequency trading firms and banks could improve their trading performance by up to 30% and increase reliability of their systems in co-location data facilities by using so-called ‘submersion cooled’ technology, according an interview with the co-founder of manufacturer Hardcore Computers by High-Frequency Trading Review (HFTR).
As if to demonstrate just how cutting edge it is, the patented technology has been dubbed ‘Liquid Blade’. It is currently at the proof-of-concept stage with a number of banks and other co-location firms. Hardcore has already secured agreements with NYSE and Equinix data centres to house Liquid Blade, co-founder Chad Attlesey tells HFTR. Attlesey developed the concept in his basement. In the same HFTR interview, Chris Butler, business development manager at Supermicro UK, which has teamed up with Hardcore to provide marketing and sales support, says: “A lot of money is spent around the world on lowering latency by the best fiber routes, by optimizing software and so on, but the blade technology we are offering is the missing link in increasing speed. If you are paying for a low latency network, you are obviously going to want a fast server on the back of it.”
In an article published in May by EuromoneyFXNews.com, Banks take fight to the algo traders, market participants told of the increasing competition to lower latency levels by co-locating with exchanges at data centres in order to match the trading speeds of HFT firms.
Liquid Blade features two Intel x5698 Xeon processors over-clocked at 4.8GHz, housed in a chassis that submerges the blades in Hardcore’s core coolant. This cooling process enhances computer performance, which translates into faster trading and pricing capabilities for HFTs.
But the advantage may not cut so deep with foreign exchange. The new technology may have less appeal to the FX markets than to equity markets, where performance rates are higher, says one major London-based specialist FX HFT firm, who EuromoneyFXNews spoke to. “A lot of the new leading-edge technology actually comes from the equity markets. For better or for worse, the typical garden-variety currency systems, such as EBS, Reuters, Currenex, are just not down to the micro-micro, nanosecond stage, and that’s what we’re talking about here.”
The fund manager argues that while the cooler server may get the faster speeds, it is only a small part of the overall process in FX high frequency trading. “Maybe microscopically it could make a difference, but compared to your trading algorithms, how you manage risk, what positions you run, and the question of whether the market is going up or down, I’m not sure how much of a difference it would make.”
The 30% improvement in performance comes at a cost – roughly 20% more than most other high-end solutions. Still, Attlesey told HFTR that liquid submersion cooling technology in a data centre can lead to a more than 60% reduction in cooling costs compared to traditional air-cooling or air-conditioning-cooling. In fact he claims the firm’s core coolant is 1,350 times better than air by volume.