Verizon eyes high-speed traders with fast network
16 April 2012
, by Greg Bensinger - New York (MarketWatch)http://www.marketwatch.com/story/verizon-eyes-high-speed-traders-with-fast-network-2012-04-16Verizon Communications Inc. is looking at Wall Street as it attempts to draw new customers with yet another high-speed network
The telcommunications heavyweight, which boasts its Verizon Wireless has the fastest wireless broadband network, is set to unveil a new service this week targeting traders for whom shaving milliseconds off deals can mean a difference of millions of dollars.
Verizon is seeking to expand in an area dominated by lesser-known firms.
Its upgraded network will link the Chicago and New York metropolitan areas, allowing trading at speeds topping out at 14.5 milliseconds roundtrip between the two cities
, said Chandan Sharma, global managing director of Verizon Financial Services.
That's as much as a 5-millisecond improvement
over Verizon's current offerings, he said.
"Milliseconds make a big difference in this market," Sharma said.
The network may help Verizon cash in on a growing market, as more firms automate their equity and futures trading to attempt to take advantage of miniscule price fluctuations occurring over fractions of a second.
Such high-frequency trading accounted for more than half the volume on U.S. stock exchanges in 2011, according to research firm Tabb Group.
"There is definitely a demand for more high-speed networks to service these industries," said John Netto, president of M3 Capital LLC, a high-frequency trading firm in New York.
"It's a space where there's not a lot of people offering these faster services."
Sharma said Verizon had increased the speed of its network by improving routers and ensuring the shortest path for its fiber between Chicago and New York.
He said Verizon will expand the service to other markets, such as Kansas City, Mo., later this year, noting that the BATS Global Markets Inc. exchange had made that an attractive area for expansion.
Verizon said it already had some customers lined up for the new service but declined to name them.