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How FPGA is becoming the financial acronym of choice

Published in Automated Trader Magazine Issue 29 Q2 2013

When Ross Freeman set off to work as a Peace Corps volunteer and teach mathematics in Ghana in the 1970s, did he have the slightest inkling of what his ideas might mean to the world's financial markets? Had he already conceived the invention that one day would allow trading firms to really think in terms of nanoseconds?

t's a reasonably safe bet that neither was the case, although it's unlikely we'll ever know. Freeman - reputed to be a gregarious man who would happily explain his ideas to those who wanted to learn - died in 1989.

But his invention of the field programmable gate array lives on and now, decades after its birth, FPGA has become the technological acronym of choice for financial firms.

Findings such as those found in the Automated Trader annual survey - which for the past couple of years has indicated increasing interest - suggest that both the sell side and the buy side have been busy investing in this area and plan to do a lot more.

So far, relatively high costs, ease-of-use issues and the general foreignness of the technology are all factors that have kept the market wary. As a result, the majority of trading firms have not yet adopted the technology.

But over time, FPGA proponents expect they will. There are powerful forces pushing in that direction, from the shift by exchanges to use higher speed Ethernet to the general 'race to zero latency' movement to the increasing complexity of trading models.

Those forces are only gaining speed while costs have been easing and could, according to some, fall further.

Matt Dangerfield, chief technology officer at low-latency solutions group Fixnetix, says the move towards FPGA is only beginning.

"It's still in its infancy, definitely," he said.

Matt Dangerfield

Matt Dangerfield

"There are so many misconceptions out there… and it's generated by a lack of understanding, and that lack of understanding and that noise generates the fear which then generates people pushing back."

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