video game Technology Is At The Core Of High-Frequency Trading

toddlers gaming

There’s a fantastic article in Securities Industry today about how video games and the technology used in producing them are being applied to current high frequency trading setups:

Securities Industry (via FT Alphaville): Forget getting your servers into the same facility where exchanges locate their matching engines for securities trades.

Co-location of servers with matching engines is not where it’s at, said consultant Carl Carrie, former head globally of algorithmic products and high frequency market making at JPMorgan.

“The most engineering ingenuity,” he said, “is being embedded in silicon.”

And that silicon is not general purpose processors, used for basic office tasks. Rather, they are field-programmable gate arrays, used widely in the video game industry to process rapidly changing graphics, action, sound – and player instructions.

One interesting note is that nVidia, widely known for manufacturing and designing graphics chips, is at the forefront of HFT technology:

That means, for instance, that in high-frequency trading, which now accounts for an estimated two-thirds of all equities trading in the United States, the main maker of microprocessors, has left the FPGA race to Nvidia, the dominant producer of graphics processors for  video gamers, said Carrie.

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