Interview, Fireside Chat
Multicast and the Markets with Brian Nigito
- The shift from physical trading floors to purely electronic mediums is projected to accelerate over the next 20 years, fundamentally altering industry structure.
- Market rules are expected to favor continuous electronic quotations within the next 10 to 15 years, eliminating the ability of physical traders to delay electronic systems.
- Standardized user-space polling models, such as IO Uring, are anticipated for broader adoption within the next two to five years to facilitate efficient zero-copy polling.
- 25 gigabit networking technologies are forecasted to see increasing relevance and widespread adoption over the next two to five years once initial barriers are overcome.
- Rising signaling rates to 25 gigabit and beyond are expected to introduce increased latency challenges due to the processing time required for forward error correction on longer data runs.
- Hardware vendors will likely increase catering to specific market requirements for 25 gigabit networking, influenced by cloud providers acting as major buyers of the technology.
- Specialized custom hardware, including programmable network cards, is predicted to become increasingly necessary as data rates climb and the 10 gigabit limit fails to meet the aggregation needs of 15 to 17 US equity exchanges.
- Layer one crosspoint devices, offering replication speeds of three to five nanoseconds without intermediate analysis, are expected to remain critical for market data distribution.
- As hardware innovation slows in key areas, software engineers are projected to face greater pressure to focus on efficiency and hardware optimization.
- A divergence in standardization trends is expected to persist between equities markets and other asset classes, with the latter maintaining control over evolution to preserve business models.
- The industry will likely continue relying on TCP for order entry flows and UDP/multicast for market data dissemination, driven by the critical mass of existing conventions and the impracticality of switching to UDP for orders across hundreds of exchanges with mixed requirements.
- Industry priorities are expected to remain focused on delivering clean data to the broadest possible audience, accepting that stragglers must engineer their own systems to recover missed messages.
- The use of custom hardware to solve aggregation bottlenecks is predicted to become more prevalent as the number of US equity exchanges providing data reaches 15, 16, or 17.
- Sequential processing within a single core is expected to remain the standard for matching engines to simplify architecture and ensure determinism, a practice already ubiquitous in high-performance exchanges.
- While "cut-through" switching (300 to 500 nanoseconds) will continue to evolve, layer one crosspoints (3 to 5 nanoseconds) are forecasted to become the standard for the most critical latency-sensitive data replication.
- Ethernet is expected to remain the primary commodity hardware choice despite the availability of specialized alternatives like InfiniBand, due to its massive ecosystem support and continuous technological improvements.