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!

Ohio Supercomputer Center Dedicates ‘Owens’ Cluster

March 29, 2017

In a dedication ceremony held earlier today (March 29), officials from Ohio Supercomputer Center (OSC) along with state representatives gathered to celebrate the launch of OSC’s newest cluster: Read more…

By Tiffany Trader

EU Ratchets up the Race to Exascale Computing

March 29, 2017

The race to expand HPC infrastructure, including exascale machines, to advance national and regional interests ratcheted up a notch yesterday with announcement that seven European countries – Read more…

By John Russell

Data-Hungry Algorithms and the Thirst for AI

March 29, 2017

At Tabor Communications’ Leverage Big Data + EnterpriseHPC Summit in Florida last week, esteemed HPC professional Jay Boisseau, chief HPC technology strategist at Dell EMC, engaged the audience with his presentation, “Big Computing, Big Data, Big Trends, Big Results.” Read more…

By Tiffany Trader

Bill Gropp – Pursuing the Next Big Thing at NCSA

March 28, 2017

About eight months ago Bill Gropp was elevated to acting director of the National Center for Supercomputing Applications (NCSA). Read more…

By John Russell

HPE Extreme Performance Solutions

Leveraging the Power of Big Data to Improve Customer Satisfaction & Brand Loyalty

In the dynamic world of retail, retailers must find ways to recognize and effectively respond to shopping behaviors, patterns, and trends in order to succeed. Read more…

UK to Launch Six Major HPC Centers

March 27, 2017

Six high performance computing centers will be formally launched in the U.K. later this week intended to provide wider access to HPC resources to U.K. Read more…

By John Russell

AI in the News: Rao in at Intel, Ng out at Baidu, Nvidia on at Tencent Cloud

March 26, 2017

Just as AI has become the leitmotif of the advanced scale computing market, infusing much of the conversation about HPC in commercial and industrial spheres, it also is impacting high-level management changes in the industry. Read more…

By Doug Black

Scalable Informatics Ceases Operations

March 23, 2017

On the same day we reported on the uncertain future for HPC compiler company PathScale, we are sad to learn that another HPC vendor, Scalable Informatics, is closing its doors. Read more…

By Tiffany Trader

‘Strategies in Biomedical Data Science’ Advances IT-Research Synergies

March 23, 2017

“Strategies in Biomedical Data Science: Driving Force for Innovation” by Jay A. Etchings is both an introductory text and a field guide for anyone working with biomedical data. Read more…

By Tiffany Trader

Data-Hungry Algorithms and the Thirst for AI

March 29, 2017

At Tabor Communications’ Leverage Big Data + EnterpriseHPC Summit in Florida last week, esteemed HPC professional Jay Boisseau, chief HPC technology strategist at Dell EMC, engaged the audience with his presentation, “Big Computing, Big Data, Big Trends, Big Results.” Read more…

By Tiffany Trader

Bill Gropp – Pursuing the Next Big Thing at NCSA

March 28, 2017

About eight months ago Bill Gropp was elevated to acting director of the National Center for Supercomputing Applications (NCSA). Read more…

By John Russell

HPC Compiler Company PathScale Seeks Life Raft

March 23, 2017

HPCwire has learned that HPC compiler company PathScale has fallen on difficult times and is asking the community for help or actively seeking a buyer for its assets. Read more…

By Tiffany Trader

Quantum Bits: D-Wave and VW; Google Quantum Lab; IBM Expands Access

March 21, 2017

For a technology that’s usually characterized as far off and in a distant galaxy, quantum computing has been steadily picking up steam. Read more…

By John Russell

Trump Budget Targets NIH, DOE, and EPA; No Mention of NSF

March 16, 2017

President Trump’s proposed U.S. fiscal 2018 budget issued today sharply cuts science spending while bolstering military spending as he promised during the campaign. Read more…

By John Russell

CPU-based Visualization Positions for Exascale Supercomputing

March 16, 2017

In this contributed perspective piece, Intel’s Jim Jeffers makes the case that CPU-based visualization is now widely adopted and as such is no longer a contrarian view, but is rather an exascale requirement. Read more…

By Jim Jeffers, Principal Engineer and Engineering Leader, Intel

US Supercomputing Leaders Tackle the China Question

March 15, 2017

Joint DOE-NSA report responds to the increased global pressures impacting the competitiveness of U.S. supercomputing. Read more…

By Tiffany Trader

New Japanese Supercomputing Project Targets Exascale

March 14, 2017

Another Japanese supercomputing project was revealed this week, this one from emerging supercomputer maker, ExaScaler Inc., and Keio University. The partners are working on an original supercomputer design with exascale aspirations. Read more…

By Tiffany Trader

For IBM/OpenPOWER: Success in 2017 = (Volume) Sales

January 11, 2017

To a large degree IBM and the OpenPOWER Foundation have done what they said they would – assembling a substantial and growing ecosystem and bringing Power-based products to market, all in about three years. Read more…

By John Russell

Quantum Bits: D-Wave and VW; Google Quantum Lab; IBM Expands Access

March 21, 2017

For a technology that’s usually characterized as far off and in a distant galaxy, quantum computing has been steadily picking up steam. Read more…

By John Russell

Trump Budget Targets NIH, DOE, and EPA; No Mention of NSF

March 16, 2017

President Trump’s proposed U.S. fiscal 2018 budget issued today sharply cuts science spending while bolstering military spending as he promised during the campaign. Read more…

By John Russell

HPC Compiler Company PathScale Seeks Life Raft

March 23, 2017

HPCwire has learned that HPC compiler company PathScale has fallen on difficult times and is asking the community for help or actively seeking a buyer for its assets. Read more…

By Tiffany Trader

TSUBAME3.0 Points to Future HPE Pascal-NVLink-OPA Server

February 17, 2017

Since our initial coverage of the TSUBAME3.0 supercomputer yesterday, more details have come to light on this innovative project. Of particular interest is a new board design for NVLink-equipped Pascal P100 GPUs that will create another entrant to the space currently occupied by Nvidia's DGX-1 system, IBM's "Minsky" platform and the Supermicro SuperServer (1028GQ-TXR). Read more…

By Tiffany Trader

Tokyo Tech’s TSUBAME3.0 Will Be First HPE-SGI Super

February 16, 2017

In a press event Friday afternoon local time in Japan, Tokyo Institute of Technology (Tokyo Tech) announced its plans for the TSUBAME3.0 supercomputer, which will be Japan’s “fastest AI supercomputer,” Read more…

By Tiffany Trader

IBM Wants to be “Red Hat” of Deep Learning

January 26, 2017

IBM today announced the addition of TensorFlow and Chainer deep learning frameworks to its PowerAI suite of deep learning tools, which already includes popular offerings such as Caffe, Theano, and Torch. Read more…

By John Russell

Lighting up Aurora: Behind the Scenes at the Creation of the DOE’s Upcoming 200 Petaflops Supercomputer

December 1, 2016

In April 2015, U.S. Department of Energy Undersecretary Franklin Orr announced that Intel would be the prime contractor for Aurora: Read more…

By Jan Rowell

Leading Solution Providers

Is Liquid Cooling Ready to Go Mainstream?

February 13, 2017

Lost in the frenzy of SC16 was a substantial rise in the number of vendors showing server oriented liquid cooling technologies. Three decades ago liquid cooling was pretty much the exclusive realm of the Cray-2 and IBM mainframe class products. That’s changing. We are now seeing an emergence of x86 class server products with exotic plumbing technology ranging from Direct-to-Chip to servers and storage completely immersed in a dielectric fluid. Read more…

By Steve Campbell

Enlisting Deep Learning in the War on Cancer

December 7, 2016

Sometime in Q2 2017 the first ‘results’ of the Joint Design of Advanced Computing Solutions for Cancer (JDACS4C) will become publicly available according to Rick Stevens. He leads one of three JDACS4C pilot projects pressing deep learning (DL) into service in the War on Cancer. Read more…

By John Russell

BioTeam’s Berman Charts 2017 HPC Trends in Life Sciences

January 4, 2017

Twenty years ago high performance computing was nearly absent from life sciences. Today it’s used throughout life sciences and biomedical research. Genomics and the data deluge from modern lab instruments are the main drivers, but so is the longer-term desire to perform predictive simulation in support of Precision Medicine (PM). There’s even a specialized life sciences supercomputer, ‘Anton’ from D.E. Shaw Research, and the Pittsburgh Supercomputing Center is standing up its second Anton 2 and actively soliciting project proposals. There’s a lot going on. Read more…

By John Russell

HPC Startup Advances Auto-Parallelization’s Promise

January 23, 2017

The shift from single core to multicore hardware has made finding parallelism in codes more important than ever, but that hasn’t made the task of parallel programming any easier. Read more…

By Tiffany Trader

HPC Technique Propels Deep Learning at Scale

February 21, 2017

Researchers from Baidu’s Silicon Valley AI Lab (SVAIL) have adapted a well-known HPC communication technique to boost the speed and scale of their neural network training and now they are sharing their implementation with the larger deep learning community. Read more…

By Tiffany Trader

US Supercomputing Leaders Tackle the China Question

March 15, 2017

Joint DOE-NSA report responds to the increased global pressures impacting the competitiveness of U.S. supercomputing. Read more…

By Tiffany Trader

CPU Benchmarking: Haswell Versus POWER8

June 2, 2015

With OpenPOWER activity ramping up and IBM’s prominent role in the upcoming DOE machines Summit and Sierra, it’s a good time to look at how the IBM POWER CPU stacks up against the x86 Xeon Haswell CPU from Intel. Read more…

By Tiffany Trader

IDG to Be Bought by Chinese Investors; IDC to Spin Out HPC Group

January 19, 2017

US-based publishing and investment firm International Data Group, Inc. (IDG) will be acquired by a pair of Chinese investors, China Oceanwide Holdings Group Co., Ltd. Read more…

By Tiffany Trader

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