Perseus Plans Metro-London Microwave Linkage05.28.2013
Building on its London-to-Frankfurt microwave route, Perseus Telecom’s next initiative is to launch intra-London market-to-market microwave connectivity.
New York-based Perseus expects its central London wireless connectivity to be up and running by the end of the summer, according to Dr. Jock Percy, chief executive. It will connect major London trading centers including NYSE Liffe and NYSE Euronext, London Stock Exchange and Turquoise, as well as Bats’ Chi-X Europe, ICAP, and several other alternative venues’ trading engines.
Perseus was a first mover on the London-to-Frankfurt route, which launched in October 2012. There was talk of an competing offering from a rival firm around that same time, but “we were already live and at their goal number driven by some of our most sophisticated buy-side customers,” Percy said, adding that Perseus could double its capacity if needed.
Clients using the microwave link between London and Frankfurt include buy- and sell-side firms, global banks, market makers and proprietary trading shops. They buy fractional ownership of Perseus’ routes and pay a monthly lease.
Speed is the primary advantage of microwave over fiber-optics, Percy said, noting that a fiberoptic link can be redundant and used for larger amounts of data traffic. The speed of microwave — for the mitigation of risk, ability to profit from microscopic opportunities, and creation of different alpha generating algorithmic strategies — could lead to more efficient markets, he said.
While microwave is faster, it has narrower capacity than fiber-optic links and thus is used to trade smaller data sets such as single stock symbols, exchange-traded funds and futures and options contracts. Fiber-optics is more cost effective and reliable analyzing and reacting against full depth of market data, pre- and post-trade data, compliance information and order routing.
“We’ve been in the business just over three years and our strength is sophistication for high-precision trading in highly competitive venues,” Percy said, adding that high-frequency and high-speed are misnomers as far as trading descriptors. “The market maker is not necessarily a high-frequency trader, but (he/she) needs to be a high precision trader because the risks are so high and the benefits are slim.”
“What people are doing is important for the good of all who need to transfer risk,” Percy said. “Without high-precision trading, the markets could have been illiquid post-2008.”
Perseus has a Latin American connection linking Brazil’s BM&F Bovespa to Nasdaq OMX and routing to over 60 major global exchanges as speedily as a typical route between New York and London. It has additional projects underway in Latin America, Percy noted.
The firm has also connected India outbound to the rest of the world and has a growing presence in other Asian financial hubs including Sri Lanka, Jakarta, Kuala Lumpur, Sydney and Hong Kong, as well as in Moscow, Istanbul, and other extremities of Europe, Percy told Markets Media.