High-Speed Trading: It's All About the Nanoseconds

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Australian startup Zeptonics said its ZeptoMux switch (pictured above) sets new standards for low-latency data transfer in financial trading environments. (Photo: Zeptonics)

The world of high-speed financial trading has entered a phase in which latency is measured not in milliseconds or even microseconds, but in nanoseconds. That's the claim from Zeptonics, a new technology firm that says its new switching device can deliver latency of around 130 nanoseconds, the fastest in the world.

Zeptonics is based in Australia and founded by former quantitative traders and trading system developers. Founder Matt Hurd said Zeptonics' goal is to boil networking gear for financial trading down to the essentials.

"The team at Zeptonics are rethinking traditional approaches to latency challenges," said Hurd, whose experience includes technology positions with Having worked with Citigroup, Bankers Trust and Zurich Capital Markets "With hardware, for example, most network switches include features that deliver flexibility, but deny you the opportunity to aggressively minimize latency. When designing the ZeptoMux, our engineers stripped out all non-essential functionality and created a streamlined ‘race car’ device to replace the broad-purpose ‘sports car’ switches currently used by the industry."

Available in August

The ZeptoMux is an Ethernet device that Zeptonics says is significantly faster than switches currently on the market. The 24-port single rack unit appliance is scheduled for general availability in August.

Hurd said the ZeptoMux is designed to funnel messages from multiple downstream nodes to a single upstream service, and back again, as quickly as possible.

“That makes it perfect for colocated trading environments, and other speed-sensitive network scenarios,” he said. “Unlike general purpose n-to-n switches, the ZeptoMux is an n-to-1-to-n device that’s specifically engineered for financial market funnels, where low latency performance is in highest demand.”

The company is also developing a 50-port layer 1 device (the ZeptoLink) with a latency of around 5 nanoseconds. This electronic patch panel will be ideal for broadcasting market data, publishing volatilities, reconfiguring connections and performing other time-critical tasks in the trading ecosystem.

“Zeptonics is raising the bar and establishing a new paradigm in low latency technology through hardware and software innovation,” said Hurd. “The world’s fastest switching device is just the beginning.”

How did Zeptonics calculate its claimed 130 nanosecond latency? Here's its explanation: "In a lab environment, the median delay from the start of packet entry to the start of packet egress was measured at 130ns (with an InterQuartile Range of 8ns) on the upstream path and 123ns (with an IQR of 7ns) on the downstream path. Measurements were taken on 1 million packets, using passive optical splits and 1310nm SFP+ transceivers with an Endace DAG 9.2X2 packet capture and timing card."