High-frequency trading (HFT) is a highly specialized type of trading that requires servers with rapid response times and low latency. HFT applications are characterized by their need for extreme performance, scalability, and reliability. Liquid-assisted air-cooled servers are the perfect solution for HFT applications due to their ability to deliver higher performance, more efficient cooling and cost savings without the traditional infrastructure required for liquid cooling deployments. Let’s dive into the critical conditions necessary for optimal high frequency trading and how liquid-assisted air-cooled servers can be used to meet them.
Speed is of the Essence
The success of HFT depends on the speed of data processing and execution. Server rooms must be located close to news sources and the stock exchange to stay ahead of the competition. According to Todd Brannon, Sr. Director, Cloud Infrastructure Marketing at Cisco, the leases in optimal locations are ‘high-dollar real estate’ so dense, efficient solutions are necessary in this market. Consequently, the servers must efficiently execute dense workloads while maximizing performance with minimal downtime. This combination of proximity and high-end technology allows HFT traders to react quickly to news and capitalize on small price movements in stocks and commodities.
But, just how important is speed?
The BBC article “Making Millions in a Blink of an Eye” features a story about the importance of speed in high-frequency trading. According to the article, in 2004, a hedge fund manager expressed dissatisfaction with a 43-millisecond trade execution time. Considering a blink of an eye takes about 300 milliseconds, it’s not surprising the reporter surmised the added time wasn’t significant to earnings. However, it wasn’t until the manager in question moved from Kansas to New York that the author realized the importance of time and location. At the New York location, the manager reduced the execution time down to 3.9 milliseconds resulting in an extra profit of $450,000.
In HFT, even a single millisecond can significantly affect profits. Kevin McPartland, a senior analyst at financial services research firm TABB Group, affirms that low latency is necessary to process market data faster than competitors. And high-frequency trading, which encompasses a range of strategies, depends on that data. “It’s like you’re seeing the Wall Street Journal five microseconds into the future,” he said.
With today’s technology, being faster than the competition is no longer a luxury; it’s a necessity and liquid-assisted air cooling is one of the most effective ways to ensure maximum server speed and performance.
What is Liquid-Assisted Air Cooling?
Liquid-assisted air cooling is exactly as it sounds; it combines direct-to-chip liquid cooling with air cooling to better dissipate heat for dense computing. Specifically, fully sealed liquid cold plates deliver fluid to the processors in series, then reject the generated heat to the hot aisle via a heat exchanger and fans. This cooling architecture combines the best of both air-cooled and liquid-cooled servers offering HFT enterprises a pathway to liquid cooling performance without costly infrastructure modifications. Let’s take a deeper look at how liquid-assisted air-cooling infrastructure can optimize server capabilities for HFT demands.
Maximize Compute Density While Reducing CAPEX & OPEX
Liquid-assisted air-cooled servers maximize compute density and reduce CAPEX and OPEX requirements. The servers maximize thermal transfer capabilities while minimizing power requirements by creating direct, yet fully sealed, contact between the processor and cooling source. As a result, more compute (up to 50kW air-cooled racks) can be packed into a smaller space at a lower cost without having to expand or make modifications to existing infrastructure. By raising the power limits and overclocking CPUs or GPUs, traders can achieve the same or better performance with less servers or floorspace.
What’s more, liquid-assisted air cooling can significantly reduce operating expenses by reducing the resources required for server maintenance and repair. The servers experience higher performance with longer lifetime cycles and fewer downtime events, resulting in less frequent hardware upgrades, reduced energy costs and greater cost savings overall. For HFT traders, densifying compute means faster trades with fewer errors, resulting in greater profitability.
Scalability Helps HFT Stay Ahead of the Curve
Scalability is another key factor to consider when utilizing HFT systems. Traders need to ensure their systems can handle large volumes of orders quickly and efficiently to keep up with market demand. This makes certain liquid cooling alternatives like immersion cooling a nonstarter since the scalability of such systems is limited. Liquid-assisted air-cooled servers, on the other hand, are highly scalable since they maintain an air-cooled server form factor.
Server Choice is Key
Server choice is key when it comes to achieving optimal performance for high-frequency trading (HFT) applications. Liquid-assisted air-cooled servers have become the go-to choice due to their unparalleled combination of power, speed and efficiency. Companies like Dell have enhanced their recent server models by optimizing them for high-performance dual-processor designs that use the latest Intel and AMD chipsets. To boost performance, Dell has collaborated with liquid cooling companies to offer self-contained liquid cooling systems for their 16th generation servers. These systems can cool up to two processors using a single cooling unit.
These specialized servers are designed to handle high processor loads while maintaining an optimal temperature, enabling faster computing and higher performance for HFT applications.
“In this particular market, it’s like the old wild west, the fastest draw wins, or in this case the fastest infrastructure, wins.” commented Todd Brannon, Sr. Director, Cloud Infrastructure Marketing at Cisco.
Liquid Cooling Supports Overclocking Systems
Through overclocking and other hardware and software optimization techniques, traders can keep up with the competition and ensure their systems are running as efficiently as possible. Overclocking is a process in which the processor’s operating speed can be increased to enhance performance at the cost of increased heat generation. By utilizing liquid-assisted air-cooled servers, traders can overclock the latest Intel Xeon Sapphire Rapids and AMD EPYC Genoa chipsets.
Conclusion
High-frequency trading (HFT) is an increasingly popular approach to trading on financial markets, requiring high-performance hardware and software to ensure fast, accurate trades. By taking advantage of liquid-assisted air-cooling solutions, HFT enterprises can break compute density barriers without breaking their budget. With powerful overclocking capabilities, traders can achieve higher performance with fewer servers and floorspace, reducing CAPEX and OPEX costs while staying ahead of the competition in today’s volatile markets.
