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NASDAQ Connectivity

Trading Access
Co-Location &Wireless Connectivity
http://nordic.nasdaqomxtrader.com/trading/equities/CoLocat
ionServices
http://www.floatingpath.com/2013/07/03/mid-week-hftprimer-co-location/
Co-location is the ability given by an exchange to high
frequency firms to place trading computers directly
beside the exchange's computers in their data centers.
The speed with which HFT machines can trade is
governed by the speed of light, thus delayed (albeit by
milliseconds) only by the distance the information is
traveling.
The monthly co-location fees for the Nasdaq's data
center in Carteret, NJ (where all the trading actually
happens) run up to $14,000 per month.
This page has the picture of the massive data
centers in Carteret (Nasdaq)
http://floatingpath.wpengine.netdnacdn.com/wp-content/uploads/2013/07/carteretnj-co-location-600x474.jpg
http://www.nasdaqtrader.com/trader.aspx?
id=pricelisttrading2
NASDAQs price list about Trading Connectivity
But there is no price of the co-location service on this
page
http://www.nasdaqtrader.com/content/Productsservices/tradi
ng/CoLo/LowLatencyFS.pdf
I think this is the price list of the co-location cost
In this document, NRC means one-time installation fee.
MRC means monthly fee, it is up to $20,000 per month
more than the $14,000, mentioned in this link.(
http://www.floatingpath.com/2013/07/03/mid-week-hftprimer-co-location/ )
https://www.nasdaqtrader.com/content/Productsservices/tra
ding/CoLo/millimeter.pdf
Wireless Connectivity
fastest point-to-point wireless solution delivering market
data at up to 40% faster than any other fiber optic
solution
In this document, NASDAQ emphasis that the latency of
its wireless connectivity is lower (faster) than NYSEs
(see page 2)
http://www.efinancialnews.com/story/2013-03-14/nasdaqnyse-microwave-chicago-new-york?
ea9c8a2de0ee111045601ab04d673622
1

The Wall Street Journal reported in November that


Nasdaq OMX and Chicago-based exchange operator
CME Group were reviewing a joint microwave corridor
between the two trading centers. Nasdaq OMX declined
to comment on the partnership.
Extranets
Direct Connect
Provides a dedicated connection for clients that are located
outside of the NASDAQ OMX Data Center
Clients computer is not in NASDAQ
Clients can receive market data from NASDAQ
Direct Connect Providers
Service Bureau

Equity Protocols

Dedicated OUCH
NASDAQ OMX plans to launch the first phase of Dedicated
OUCH in Q1, 2014 with each server housing up to 30 ports.
Each Dedicated OUCH server will be offered at a fee
of $5,000 per month*, with an installation fee of $5,000.
Note 2013 Dedicated OUCH is currently only available on
The NASDAQ Stock Market.
OUCH
http://searchfinancialsecurity.techtarget.com/definition/OUC
H-protocol
OUCH is a digital communications protocol that allows
customers of the NASDAQ (National Association of
Securities Dealers Automated Quotations) to conduct
business in the options market. With OUCH, subscribers
can place, execute or cancel orders. OUCH allows
subscribers to integrate NASDAQ into their proprietary
networks. The earliest version of OUCH was developed
in 1997. The protocol has been revised numerous times
since then.
OUCH is a low-level native protocol designed for high
performance and minimal latency. In order to achieve
optimum functional efficiency and speed, some
flexibility is sacrificed. NASDAQ offers other protocols
that are more developer-friendly but do not provide the
degree of performance achievable with OUCH.
Fees of the ports
http://www.nasdaqtrader.com/Trader.aspx?
id=PriceListTrading2#connectivity
For Order Entry internet ports, an additional charge
of $200 per month for each internet port will be
2

applied to support bandwidth costs.


For Market Data internet ports, an additional charge
of $600 per month for each internet port will be
applied to support bandwidth costs.

RASHPort
FIX
CTCI
QIX

Options Protocols

OTTO
OUCH To Trade Options (OTTO)
FIX
Fees
Connectivity via FIX for non-trading activity is $500 per
port/month
SQF

Testing
Nasdaq Launches Algo Test Facility by Becca Lipman 10/14,
2013
http://www.wallstreetandtech.com/technology-riskmanagement/nasdaq-launches-algo-trading-testfacili/240162587
Partner with Thesys Technologies
Offer a trading algorithm test facility, a testing
environment that will simulate trading on all major US
equity exchanges.
Expected to launch in Q1 2014
Provide reports from simulations that show the quality of
the quote processing, latency, all the way down to the
order handling
Provide traders with valuable insights about risk and
performance, including the ability to evaluate the cost of
adverse selection for specific trading strategies.
Allows you to measure economic impact of latency on
trading systems. You'll be able to see how much better
or worse you would have of done if you were 100
microseconds faster or slower.
Primary technology challenge
Adapt the systems to speak FIX protocol and native
protocol of all exchanges
First phase
simulations for the NASDAQ Stock Market
Goal
3

To support all major U.S. equities exchanges


along with their order types and protocols so
user activity may interact with the historical
orders of other market participants.
---------------------------------------------------------------------------------------------------------- Nasdaq OMX connectivity disaster highlights stumbling markets
23 August, 2013 Written by Elliott Holley
http://www.bankingtech.com/161382/nasdaq-omx-connectivitydisaster-highlights-stumbling-markets/
This article mentions the effects of the three-hour trading
crash at Nasdaq OMX
Perhaps we can refer to this article to discuss something
about the stability of Nasdaq OMX connectivity
Nasdaq plan to offer algorithmic trading denied by US regulator
By John McCrank, Mon Jan 14, 2013 1:55pm EST
http://www.reuters.com/article/2013/01/14/nasdaq-secidUSL2N0AJ8JQ20130114

SEC concerned about competition, risk controls

The proposal could create an inappropriate advantage to


Nasdaq over broker-dealers

Nasdaq's proposal did not indicate how or whether pretrade controls would be applied to the orders.

Orders would compete against broker-dealer services