The London Stock Exchange has switched on an ultra fast trading connection, called Performance Channels.
The new system delivers trading information down 100 megabyte lines, in order to ensure trades are carried out as quickly as possible on up-to-date information. The average round trip network latency between City traders and the system is below one millisecond on the new lines.
It has been launched to make sure the exchange can more efficiently process the number of high volume, small trades that has increased since the launch of its TradeElect platform last June.
Most of those trades are conducted automatically using algorithmic models set by traders. Hedge funds commonly use algorithms to quickly take advantage of small changes in share values.
The LSE said the new service will ensure that trading data is delivered at “industry-leading speed” even during the highest peaks in trading activity.
David Lester, chief information officer at the LSE, said: “The introduction 12 months ago of TradElect, our new electronic trading system, has facilitated record volume growth on our markets.
“The Performance Channels service gives member firms using algorithmic trading models greater visibility of the spikes and events that occur during periods of high trading activity. The immediate delivery of price data during these peaks creates additional trading opportunities.”
Some 40 businesses have signed up to the service so far, the LSE said, after they trialled the service to ensure their own network infrastructure could carry the higher data load.