Arista Finds Niche in High Frequency Trading

By Michael Feldman

September 14, 2009

If you’ve been following the news lately, algorithmic trading, also known as high frequency trading (HFT), has been getting a lot of attention. In a nutshell, high frequency trading uses supercomputing technology to make money from short-term fluctuations in market demand. This is accomplished by aggregating tiny profits over large numbers of transactions. The key to the application model is to find small discrepancies in the buy-sell spread and execute the trade before slower computers can do so.

Not all of the attention has been flattering. By outmaneuvering long-term investors that trade via desktop computers, it is claimed that HFT’ers, unfairly squeeze profits from them. Along the same lines, high frequency trading is thought to overload the market with speculation, and in doing so, increase its volatility.

But whatever the objections, algorithmic trading is big business. No one really knows exactly how much money is being generated, but Larry Tabb of the Tabb Group estimates the take at $8 billion per year. That kind of money is bound to attract a lot of innovation. Investment banks such as Goldman Sachs and hedge fund firms like Citadel Investment Group and Renaissance Technologies generate large chunks of their revenue from this form of electronic trading and are presumed to have invested heavily in HFT infrastructure.

The network vendors are certainly benefitting from this bonanza, including newcomer Arista Networks. As an Ethernet switch vendor Arista has positioned itself as a provider of cloud computing network gear.  The company is looking to ride the 10 GigE deployment wave, as the technology becomes mainstream over the next few years. But today, fully 30 percent of Arista’s revenue is being generated in the financial services space, with hedge funds the largest segment. Almost all of this is focused on HFT-type deployments.

As it turns out, Arista Ethernet switches are a good fit for this application segment for a number of reasons, the primary one being the low latency nature of the company’s hardware. High frequency trading needs to react as quickly as possible to market data, so minimizing latency has become an obsession. For the entire trading pipeline, best-case latencies (which encompass the market data feed, the ticker plant, the messaging platform, and the server that executes the trade) are in the 25 to 50 microsecond range. As processors become faster and the application software becomes more refined, end-to-end latency is expected to drop below 25 microseconds over the next year.

But those numbers don’t include the network switch in the middle. A typical high-end Ethernet switch adds another 5 to 10 microseconds, which significantly bumps up total latency.

On Monday, at the High Performance Computing on Wall Street conference in New York, Arista Founder and Chief Development Officer Andy Bechtolsheim is scheduled to talk about some of the trends in networking that are shaping how the financial crowd is attacking the latency issue. No doubt, he will highlight his company’s own 10 GbE cut-through switches, which are specifically designed to minimize latency.

In a recent conversation with HPCwire, Bechtolsheim said Arista’s 7100 series switches can deliver a packet with a port-to-port latency of less than a microsecond. Compared to the aggregate latency in the rest of the data pipeline, this is almost negligible. Even the latest Nexus 5000, Cisco’s unified fabric switches, deliver latencies in the range of 3 to 5 microseconds, while the Nexus 7000 and massive installed base of Catalyst products typically add over 20 microseconds to each network hop.

Bechtolsheim thinks the need for fast execution in these trading applications is making adoption of ultra low latency Ethernet switches a “no-brainer.” The overarching goal is to essentially remove the switch from the equation so that HFT system architects can concentrate on decreasing latency on the application side (ticker plant, messaging platform, and trading server) by optimizing the software and upgrading the hardware with the latest CPUs, FPGAs, or whatever.

With all this talk of low latency, you would think InfiniBand would be getting a lot more attention in HFT. Mellanox, after all, advertises 200 nanosecond latencies in its current generation QDR technology. And just recently Voltaire, which employs Mellanox silicon in its InfiniBand switches, announced it had teamed with NYSE Technologies to offer an InfiniBand-based market data system that promises 10 microsecond latency, with a throughput of more than a million messages per second.

But according to Bechtolsheim, for these data feed applications, InfiniBand is not really a good fit. In general, Bechtolsheim has been a proponent of InfiniBand switching in HPC, especially in his role at Sun Microsystems. But in this area, he says, the problem is that market data feeds are arriving in GigE or 10 GigE pipes. So not only is QDR (40 Gbps, 32 Gbps net) InfiniBand throughput overkill, but the non-native protocol is problematic. “By the time you convert from InfiniBand to Ethernet, ” said Bechtolsheim, “you’re already 10 microseconds behind.”

For this class of applications, the InfiniBand effort has focused on tuning the device drivers to increase performance, and in Voltaire’s case, adding proprietary messaging software to accelerate application performance. Bechtolsheim contends the InfiniBand contingent hasn’t been able to get much of an edge compared to 10 GigE switching. To date there are no field deployments of InfiniBand-based HFT — at least none that have been publicly announced.

Besides latency and Ethernet compatibility, the other big requirement for these financial apps is reliability. “Robustness is paramount, since if the network goes down, things can get very expensive very fast,” observed Bechtolsheim. Here Arista points to its EOS (Extensible Operating System) software, which contains self-healing functionality in order to keep the switch running. Bechtolsheim said it has performed essentially flawlessly and is one of the reasons they’ve been able to get traction in these kinds of accounts.

Arista is partnering with many of the vendors selling servers, host adapters, and message platforms appliances, into the HFT market. Message platform partners include Solace Systems, Tervela, TIBCO Software and Exegy, among others, while NIC partners include Broadcom, Chelsio, Intel, Neterion, Mellanox, and QLogic.

Subscribe to HPCwire's Weekly Update!

Be the most informed person in the room! Stay ahead of the tech trends with industy updates delivered to you every week!

And So It Begins…Again – The FY19 Exascale Budget Rollout (and things look good)

February 23, 2018

On February 12, 2018, the Trump administration submitted its Fiscal Year 2019 (FY-19) budget to Congress. The good news for the U.S. exascale program is that the numbers look very good and the support appears to be stron Read more…

By Alex R. Larzelere

Lenovo Unveils Warm Water Cooled ThinkSystem SD650 in Rampup to LRZ Install

February 22, 2018

This week Lenovo took the wraps off the ThinkSystem SD650 high-density server with third-generation direct water cooling technology developed in tandem with partner Leibniz Supercomputing Center (LRZ) in Germany. The ser Read more…

By Tiffany Trader

Start-up Aims AI at Automated Tuning of Complex Systems

February 22, 2018

Today’s bigger, more complex, connected and intelligent systems have an exponentially higher number of connections, dependencies, interfaces, protocols and processing architectures that, if not optimized, will hamstrin Read more…

By Doug Black

HPE Extreme Performance Solutions

Experience Memory & Storage Solutions that will Transform Your Data Performance

High performance computing (HPC) has revolutionized the way we harness insight, leading to a dramatic increase in both the size and complexity of HPC systems. Read more…

Do Cryptocurrencies Have a Part to Play in HPC?

February 22, 2018

It’s easy to be distracted by news from the US, China, and now the EU on the state of various exascale projects, but behind the vinyl-wrapped cabinets and well-groomed sales execs are an army of Excel-wielding PMO and Read more…

By Chris Downing

Lenovo Unveils Warm Water Cooled ThinkSystem SD650 in Rampup to LRZ Install

February 22, 2018

This week Lenovo took the wraps off the ThinkSystem SD650 high-density server with third-generation direct water cooling technology developed in tandem with par Read more…

By Tiffany Trader

Start-up Aims AI at Automated Tuning of Complex Systems

February 22, 2018

Today’s bigger, more complex, connected and intelligent systems have an exponentially higher number of connections, dependencies, interfaces, protocols and pr Read more…

By Doug Black

HOKUSAI’s BigWaterfall Cluster Extends RIKEN’s Supercomputing Performance

February 21, 2018

RIKEN, Japan’s largest comprehensive research institution, recently expanded the capacity and capabilities of its HOKUSAI supercomputer, a key resource manage Read more…

By Ken Strandberg

Neural Networking Shows Promise in Earthquake Monitoring

February 21, 2018

A team of Harvard University and MIT researchers report their new neural networking method for monitoring earthquakes is more accurate and orders of magnitude faster than traditional approaches. Read more…

By John Russell

HPE Wins $57 Million DoD Supercomputing Contract

February 20, 2018

Hewlett Packard Enterprise (HPE) today revealed details of its massive $57 million HPC contract with the U.S. Department of Defense (DoD). The deal calls for HP Read more…

By Tiffany Trader

Fluid HPC: How Extreme-Scale Computing Should Respond to Meltdown and Spectre

February 15, 2018

The Meltdown and Spectre vulnerabilities are proving difficult to fix, and initial experiments suggest security patches will cause significant performance penal Read more…

By Pete Beckman

Brookhaven Ramps Up Computing for National Security Effort

February 14, 2018

Last week, Dan Coats, the director of Director of National Intelligence for the U.S., warned the Senate Intelligence Committee that Russia was likely to meddle in the 2018 mid-term U.S. elections, much as it stands accused of doing in the 2016 Presidential election. Read more…

By John Russell

AI Cloud Competition Heats Up: Google’s TPUs, Amazon Building AI Chip

February 12, 2018

Competition in the white hot AI (and public cloud) market pits Google against Amazon this week, with Google offering AI hardware on its cloud platform intended Read more…

By Doug Black

Inventor Claims to Have Solved Floating Point Error Problem

January 17, 2018

"The decades-old floating point error problem has been solved," proclaims a press release from inventor Alan Jorgensen. The computer scientist has filed for and Read more…

By Tiffany Trader

Japan Unveils Quantum Neural Network

November 22, 2017

The U.S. and China are leading the race toward productive quantum computing, but it's early enough that ultimate leadership is still something of an open questi Read more…

By Tiffany Trader

AMD Showcases Growing Portfolio of EPYC and Radeon-based Systems at SC17

November 13, 2017

AMD’s charge back into HPC and the datacenter is on full display at SC17. Having launched the EPYC processor line in June along with its MI25 GPU the focus he Read more…

By John Russell

Researchers Measure Impact of ‘Meltdown’ and ‘Spectre’ Patches on HPC Workloads

January 17, 2018

Computer scientists from the Center for Computational Research, State University of New York (SUNY), University at Buffalo have examined the effect of Meltdown Read more…

By Tiffany Trader

IBM Begins Power9 Rollout with Backing from DOE, Google

December 6, 2017

After over a year of buildup, IBM is unveiling its first Power9 system based on the same architecture as the Department of Energy CORAL supercomputers, Summit a Read more…

By Tiffany Trader

Nvidia Responds to Google TPU Benchmarking

April 10, 2017

Nvidia highlights strengths of its newest GPU silicon in response to Google's report on the performance and energy advantages of its custom tensor processor. Read more…

By Tiffany Trader

Fast Forward: Five HPC Predictions for 2018

December 21, 2017

What’s on your list of high (and low) lights for 2017? Volta 100’s arrival on the heels of the P100? Appearance, albeit late in the year, of IBM’s Power9? Read more…

By John Russell

Russian Nuclear Engineers Caught Cryptomining on Lab Supercomputer

February 12, 2018

Nuclear scientists working at the All-Russian Research Institute of Experimental Physics (RFNC-VNIIEF) have been arrested for using lab supercomputing resources to mine crypto-currency, according to a report in Russia’s Interfax News Agency. Read more…

By Tiffany Trader

Leading Solution Providers

Chip Flaws ‘Meltdown’ and ‘Spectre’ Loom Large

January 4, 2018

The HPC and wider tech community have been abuzz this week over the discovery of critical design flaws that impact virtually all contemporary microprocessors. T Read more…

By Tiffany Trader

Perspective: What Really Happened at SC17?

November 22, 2017

SC is over. Now comes the myriad of follow-ups. Inboxes are filled with templated emails from vendors and other exhibitors hoping to win a place in the post-SC thinking of booth visitors. Attendees of tutorials, workshops and other technical sessions will be inundated with requests for feedback. Read more…

By Andrew Jones

How Meltdown and Spectre Patches Will Affect HPC Workloads

January 10, 2018

There have been claims that the fixes for the Meltdown and Spectre security vulnerabilities, named the KPTI (aka KAISER) patches, are going to affect applicatio Read more…

By Rosemary Francis

GlobalFoundries, Ayar Labs Team Up to Commercialize Optical I/O

December 4, 2017

GlobalFoundries (GF) and Ayar Labs, a startup focused on using light, instead of electricity, to transfer data between chips, today announced they've entered in Read more…

By Tiffany Trader

Tensors Come of Age: Why the AI Revolution Will Help HPC

November 13, 2017

Thirty years ago, parallel computing was coming of age. A bitter battle began between stalwart vector computing supporters and advocates of various approaches to parallel computing. IBM skeptic Alan Karp, reacting to announcements of nCUBE’s 1024-microprocessor system and Thinking Machines’ 65,536-element array, made a public $100 wager that no one could get a parallel speedup of over 200 on real HPC workloads. Read more…

By John Gustafson & Lenore Mullin

Flipping the Flops and Reading the Top500 Tea Leaves

November 13, 2017

The 50th edition of the Top500 list, the biannual publication of the world’s fastest supercomputers based on public Linpack benchmarking results, was released Read more…

By Tiffany Trader

V100 Good but not Great on Select Deep Learning Aps, Says Xcelerit

November 27, 2017

Wringing optimum performance from hardware to accelerate deep learning applications is a challenge that often depends on the specific application in use. A benc Read more…

By John Russell

SC17: Singularity Preps Version 3.0, Nears 1M Containers Served Daily

November 1, 2017

Just a few months ago about half a million jobs were being run daily using Singularity containers, the LBNL-founded container platform intended for HPC. That wa Read more…

By John Russell

  • arrow
  • Click Here for More Headlines
  • arrow
Share This