JSE gets sub-0.5ms link to outside world for high frequency trading

With speed meaning the difference in making a trade and possibly losing it on the Stock Exchange, Dark Fibre Africa (DFA) and Teraco today unleashed its high-speed fibre line directly to the Johannesburg Stock Exchange (JSE).

DFA installed two dedicated fibre pair lines that run from Teraco’s centre in Isando directly to the JSE in Sandton, Johannesburg – 32km away – for a blistering-fast 1 gigabit connection.

The line speed boasts a latency of under 500 microseconds – or half a millisecond – which is necessary for traders on the floor, as making trades with other global markets are heavily dependent on how quickly the trades can be completed. According to the some reports, about a fifth of all trades on the JSE are what’s known as “high frequency trading” – which means shares that are bought or sold by computer algorithms rather than human investors, based on market movements over split second times. It’s a controversial way of making money, but growing rapidly worldwide all the same.

To give you an idea of the low latency, 500 microseconds is half a millisecond. This line speed is achieved with the fact that there are no routers, switches or other equipment that can hamper the connection speed. During test, DFA actually achieved a latency of 342 microseconds on the primary line, while a latency of 490 microseconds was achieved on DFA’s diverse route, which is slightly longer route acting as a fail-over.

“DFA has directly connected Teraco to the JSE with single route fibres allowing for less than 500 microsecond round trips, which is extremely fast,” said Jan Hnizdo, chief financial officer at Teraco, during the unveiling on Tuesday.

The connection is MEF 2.0 complaint, has transparent EPL connectivity and is NOC monitored 24-hours a day.

“The route, which spans 32 km, enables the Teraco community to provide capital market participants with solutions for high-bandwidth, low-latency connectivity. In real terms, this link offers a sub-500 microsecond round trip and is a virtual extension of the JSE’s ‘meet me room’ into Teraco,” he added.

But the connection between the JSE and Teraco’s data centre is more than just a direct access point. By connecting brokers, traders, market data providers and the carriers that service the capital markets ecosystem, it allows them to connect with more than 150 network and connectivity providers around the world.

“Teraco is an African and international connectivity gateway. We provide access to over 150 international and local telecommunications companies, including the submarine cables landing in South Africa,” he concluded.


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