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Low latency optimisation using Software Defined Radio technology

Published in Automated Trader Magazine Issue 43 Q2 2017

High frequency traders are using radio links to reduce latency. Simply buying the fastest transceivers and repeaters is not enough - design and configuration are critical. We show how Software Defined Radio (SDR) can be used to optimise a network and to provide advantages that hardware does not.


Victor Wollesen

Victor Wollesen is the founder of Per Vices Corporation, a manufacturer of high performance Software Defined Radio platforms.

Designing and bringing up a fast and reliable radio link poses considerable challenges. Further optimising the link for latency only adds to the challenge. Even with the fastest hardware, an appropriate balance needs to be struck between channel reliability, capacity and bandwidth. A careful consideration of the relationship between these factors is important for successfully optimising the functional latency - the actual latency required to send a single quantum of information - of a radio link. We begin by taking a closer look at exactly what the factors mean and their consequences for performance, before looking at some of the considerations for choosing a specific modulation scheme. A good understanding of these factors will help us balance the latency impact imposed by practical concerns including multipath, fading and inter-symbol interference.

Current point-to-point microwave radio hardware in the high frequency trading (HFT) sector is focused on delivering performance gains by reducing latency. The consequence of this focus on latency is that potential gains in reliability are often overlooked and traded against increases in transmission power. Low latency microwave providers have turned to custom silicon to deliver the fastest analogue amplifiers and regenerators. In addition to purchasing the fastest silicon available, network designers carefully plan routes to minimise the number of towers required to complete a loop. When a direct line of sight connection is not possible, analogue amplifiers provide the fastest mechanism to compensate for path loss and ensure sufficient signal strength at the repeater. As amplifiers contribute to the noise of the signal, very long routes may also have signal regenerators installed. These regenerators demodulate the digital waveform and then remodulate it, while providing in the process a new 'clean' signal that is comparable to the original. These regenerators are fairly simple devices, but have a higher latency cost than pure amplifiers.

Nevertheless, in the quest for speed, minimising the number of towers required to link a given span is generally considered to be the safest strategy. The easiest way to close the gap between reliability and latency is by increasing transmitter output power. However, regulatory agencies have been increasingly resistant to approving higher transmission powers. Here we look at using Software Defined Radio schemes to dynamically adjust the modulation scheme. This helps to reduce the number of towers required to span a given link, and thereby minimises latency. SDR provides unique opportunities for the HFT market, which traditional amplifiers and regenerators cannot offer. Additionally, the incorporation of field-programmable gate arrays (FPGA) into the signal processing start and end points provides another mechanism for users to reduce end point latency - the time to convert a signal from wired to wireless or vice versa - to the destination network.

Traditional radio links are designed to maximise the amount of information sent over a given period of time. This article deals with those links designed to minimise the specific amount of time required to send a specific amount of information. We begin by providing the background necessary to recognise the design choices that differentiate low latency links. The most logical place to start is by discussing exactly how we measure the rate at which we send information over a network.

The fundamental utility of a radio link relates to its capacity to help us reliably communicate information. This is called its 'channel capacity' and is measured in terms of bits per second. Channel capacity is directly proportional to bandwidth and is theoretically bounded by our symbol modulation scheme and the signal-to-noise (SNR) ratio, as shown in Figure 01. Its relationship with channel capacity is fairly straightforward. Higher order modulation schemes are capable of supporting greater transfer rates, but are also more likely to result in errors due to the presence of noise or interference. Note that most practical radio links use the signal-to-interference-plus-noise ratio (SINR) as a figure of merit instead of SNR because it includes sources of interference.

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