What are FPGAs used for in trading?

Without loading a CPU, FPGA hardware is able to quickly execute various trading tasks, which among others include: Parsing the incoming data, providing data filtering, decoding, and normalization. Carrying out pre-trade volume, price, and collateral checks.

What is FPGA in finance?

Field-programmable gate arrays (FPGAs) are gaining traction in the financial services field. They’re silicon chips, but they can be programmed as if they were software. Using prebuilt logic blocks and programmable routing resources, FPGAs are configurable through software.

How are FPGAs used in high frequency trading?

High-Frequency Trading (HFT) systems require extremely low latency in response to market updates. This motivates the use of Field-Programmable Gate Arrays (FPGAs) to accelerate different system components such as the network stack, financial protocol parsing, order book handling and even custom trading algorithms.

What is the difference between high-frequency trading and low latency trading?

Since lower latency equals faster speed, high-frequency traders spend heavily to obtain the fastest computer hardware, software, and data lines so as execute orders as speedily as possible and gain a competitive edge in trading.

What is low latency trading?

In capital markets, low latency is the use of algorithmic trading to react to market events faster than the competition to increase profitability of trades. There are many technical factors which impact on the time it takes a trading system to detect an opportunity and to successfully exploit that opportunity.

What is colocation HFT?

In high-frequency trading (HFT), colocation refers to a dedicated space within a data center belonging to stock exchanges. Its primary purpose is to locate computers owned by HFT traders and firms in the same building as the stock exchange servers.

Why don’t more HFT systems use FPGAs?

Because some of these systems described above only have a feed handler implemented on the FPGA, because the strategy changes too much, or is too hard to implement on FPGAs. Others claim that they have also implemented trading strategies on FPGAs or using high performance NICs instead of FPGAs to build HFT systems.

How do FPGA firms accelerate financial operations?

The HFT firms that integrate FPGA platforms into their computer infrastructures create powerful trading engines with ultra-low latency and outstanding computational capabilities. As shown above, various financial operations can be accelerated by means of hardware implementation.

What is the role of FPGA in high-frequency trading?

The use of FPGA platforms in high-frequency trading enables companies to collect, cleanse, enrich, and disseminate the burgeoning array of rapidly changing financial data in short terms. Without loading a CPU, FPGA hardware is able to quickly execute various trading tasks, which among others include:

What is an FPGA and why should you care?

FPGAs mainly aim to address the concern of quickly processing data without paying the propagation costs. This is particularly in contrast with devices such as GPGPU (or any PCI-dwelling card, such as Xeon Phi) which pay performance penalties for getting data to/from the device. That said, DMA options are improving in this regard, too.