Presenting The Two-Tier Market: Mapping Europe's Microwave Tower Network

Tyler Durden's picture

When Michael Lewis ended "Flash Boys", he left the door open on what the sequel to the blockbuster may well be: an expose on the even newer, faster paradigm of trading, one involving microwave signals and line-of-sight towers, which transmit information and trading signal even faster than fiberoptic cables, which in a world in which milliseconds and increasingly, nanoseconds, are critical, is all that matters. In short, a market in which making trading decisions has nothing to do with fundamental or technical analysis, and everything to do with spending tens if not hundreds of millions to simply be faster than the "other guy" and to be able to frontrun the broader order flow with results such as Virtu's "Holy Grail" 1,237 of 1,238 profitable, and perfectly legal, trading days.

As a preview of what Michael Lewis is likely working on right now, tomorrow, the Sniper In Mahwah blog will post a long story detailing what the author believes are the bulk of not all of the towers used by the HFT players. As the author reveals to us, "I think some HFT players won't like the map I'll post (because they want to stay "secret"), but I have found all of them only by using online/public documents. So easy."

"Easy" indeed, as long as one has the motivation to do some digging, which inexplicable virtually no financial journalists do.

So without further ado, the image below is a screen capture of the Google Earth map file which will be released officially tomorrow on his blog, with public documents linking each tower to its owner. The creator of the map thinks that it "should make some noise," although considering the vast financial resources and power over politicians the HFT lobby has, we wouldn't be surprised if, quite quickly, this latest story is promptly disappeared.

After all, the last thing retail investors need to be reminder of every day, is that there is a rigged market for frontrunning, predator HFTs, and then a market for everyone else, i.e., the prey.

Source: Sniper In Mahwah

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Timmay's picture

Paging ISIS.....

FieldingMellish's picture

Not only do we have to supply these idiots with weapons, now we have to choose their targets for them. Jeez...

Four chan's picture

a rigged market seems like a worthy target if if hampers fake order flow.

Divided States of America's picture

Looks like ISIS is offloading their purported silver holdings into the open market because silver just got blowtorched to another low just now.

Yeah, everything is rigged these days if political power or money is involved.

Bangalore Equity Trader's picture

Listen Mellish. Watch your tone regarding ISIL. Some respect is due.

FieldingMellish's picture

Not really. They are just agents for others.

Four chan's picture

errand boys, sent by grocery clerks, to collect a bill.

BobPaulson's picture

there's nothing that I detest more than the stench of lies.  (I would give you more up arrows if I could).

zhandax's picture

Bangalore, if you are not a .gov troll, I really hope you find your way here on the Hedge.  If not, it will be a long, hard grind to oblivion.   This place has worn down far better trolls than you.

Bangalore Equity Trader's picture

Listen zhandax, like the "GRIND" you're doing to G­o­j­o­b­3­6­0.c­o­m?

You really got him on "THE GO". Professional grinders never sleep.

Listen why not just come out with a "MESSAGE" page on the Hedge and include all the things we cannot say. Then during the "LOGIN" process make us say the "PLEDGE" of allegiance to the "MESSAGE" page.


NoDebt's picture

Now hold on a minute, some of those lines go straight to Brussels, Belguim.  What the heck could be in Brussels that's so important?

Oh, yeah.

tarabel's picture


Sprouts are the new tulips.

Jack Burton's picture

I have a brother who is a big active retail trader. He blows his stack when I remind him 80% of trades are HFT robots running programs designed by the greatest mathematical and physics minds. He somehow thinks this is false, and markets are where the world gathers to trade freely and fairly the stock of the corporate world in an exercise of price discovery. Also, as for the Fed Money printing, he says, and I quote. "I hope they keep printing, I love it".

kowalli's picture

All americans need to stop giving your money to banks and take slave credits from them... One way you save some money or another way they bail out banks, not you get nothing

tarabel's picture



But all you Europeans and Russians need to stick with the slave credits plan. Why is that?


Well, um, because we don't have any guns and can no longer resist our Masters. So please save us and we'll call you a bunch of gauche, barbaric losers as a way of thanking you.

Freddie's picture

You should tell him that when it all falss apart from fiat printing and he blows up his account that he should expect to come live with you.  He sounds like a bull market genius.  This time it is 8x worse because of the money printing.  The dude will end up like bug meet windshield. 

The traders I have talked to said all accounts order routing gets F'ed with unless you have a $1 m account and they still F with you.   Interactive Brokers fills are the closest to being "fair" from people I have talked to. 

Fuku Ben's picture

My condolences for your loss

Unless you're being a typical brother and purposely trying to piss him off don't waste your breath. The anger is his subconscious forcing his conscious self into abject denial in order to protect his limited mental capacity to face the truth. Believe me if you push hard enough he will physically attack you to shut you up.

In case anyone is interested this mental block is in part a means of the subconscious protecting the conscious mind from the serious damage or destruction (ie. mental breakdown) that would occur from being forced to face a reality that he consciously doesn't know or want to know exists. But subconsciously he does know. Most of the world is like that right now. I'm still amazed how many people didn't snap out of it after 9 11.

And I'm sure if you're a smart prepared brother you've got lots of guns, gold and grub and will be there to support him after the crash. And when he's cleared his mind and ready then you'll be a great brother and bust his balls about what an idiot he was before the crash.

Anyway, he'll figure it out soon enough because the end is nigh. The signs are everywhere.

Notsobadwlad's picture

I think the people need to learn to do without bank fiat Ponzi money and then just exclude the banks from all transactions. The world would be much better off.

ozsumo's picture

It is a mistake to view this technology as new. The first microwave links between Chicago and New York are 65 years old this month: Historic Microwave

Michael Lewis was also a little bit misleading with his microwave narrative: Flashboy's deceptive microwave ending

wesson's picture

Doesn't sound logical to me. air communication via a network of tower can't be faster than a straight cable of optical fiber. 

In each tower this mean demodulation are remodulation, which is loosing extra time.

Also there is consideration about stability and reliability of the signal. Air transmissions are prone to many disturbances and must be embedded with bigger error correction to securize the transmission. All these cost some extra time.



ForTheWorld's picture

It's about latency using the backbones which also carry internet traffic, and having your own network. Using microwave towers creates a line of sight path of transmission, giving the shortest distance between two points, rather than having to be routed through myriad exchanges just to get from say, Seattle to New York.

The major benefit of using microwave transmission is you have your own network - your internal network can be connected to just your microwave transmission towers, and so that encrypted transmission you send from Seattle to New York will only ever be seen by a computer at either end of the signal chain.

Freddie's picture

How far can microwave be sent?

ForTheWorld's picture

It depends on the height of the transmitter & receiver (taking into account curvature of the Earth). Almost 50km can be achieved if the tower is at a height of up to 200m. If you had to go along the interstates, you'd need 91 towers from Seattle to New York, which is probably cheaper than laying your own cable coast to coast.

Edit: Bear in mind I've never done anything on a continental scale, so I'm only drawing from theory and limited (in size) practice.

zhandax's picture

91 relays @ 25 miles per and we get less latency?

Bangalore Equity Trader's picture

Listen zhandax. You're missing the point here so let me be real clear with you.

NOC latency can be engineered to perrrrfection. Get it now?

ForTheWorld's picture

A microwave signal can travel faster through the air than a beam of light can travel through a fibre optic cable. When milliseconds count...

Dewey Cheatum Howe's picture

They can also be jammed. You can syphon a shitload of leveraged liquidity out of the market into... and force them to literally create liquidity out of thin air while everyone knows where that liquidity went along with the fact they can't touch it without legitimizing said liquidity syhon tank showing just what a rigged shitshow it is.

Ralph Spoilsport's picture

They tried running their own private fiber optic cable but people ignored the orange safety cones and drove over it anyway.

q99x2's picture

What happens when bird poop falls through the transmission signal?

Took Red Pill's picture

Then a small fire should easily be able to bring down one of these towers since it worked so well on WTC building #7

22winmag's picture

If not a small fire, then some small arms fire can take down microwave towers, cell towers, and an entire electrical grid.


High velocity lead and brass works wonders when it's aimed in the right places.

nopat's picture

Interesting stuff, what?  Like the author said, this is all informationt that's publicly available and has been known to people in the industry since...for a really long time now (for example, Spread Networks was far from being quiet back in 2009).  Not exactly hush-hush.

MontgomeryScott's picture

Perhaps this explains some of the 'mystery towers' springing up around the CONUS.

StrikerMax's picture

I think people should Think before they embarque on this complete and total Non-Sense ...

- For one : Converting from RF modems to actual data usable on HFT would be FAR slower on RF links then it is on current fiber optics network when those are properly routed, and they Are.

- Second: It's IMPOSSIBLE to make any trade at the nanosecond, so no, Nanoseconds simply don't matter. I actually Doubt they can be made at the sub-milisecond as it is usually propagated on the news.

- Third: All major HFT traders have the same access, that is: distance bandwidth and latency, to the trading machines on the stock exchanges, so gaining another type of route would be not only Slower and more likelly would Scramble their HFT trading also due to inconsistencies on time to trade and actual syncronization of slower data nodes ...

- Forth: RF as Way Less bandwidth and for those depending on huge amounts of data from Thousands of companies and 10 of thousands stock/index price quotes ... RF would simply be unfeasable.

So lets tone down this HFT Myths out there and focus on reality ... ok?



alexpi's picture

People should shut up about things they don't understand. I've built the first microwave NY-Chicago network, and we are planning NY-London soon:

To your points:
1) you clearly don't realize that fiber is *so* much slower that whatever latency microwave equipment has is miniscule. More precisely, (roundtrip) speed of light NY-Chi is ~8ms. Speed of light in fiber (as crow flies) is ~11.6ms. That's 3.6ms right there. Assuming someone built that link with 50 repeaters (mine has 18), the latency per wireless radio (for it to be comparable with fiber) would be 72us. The off-the-shelf radios we used on day 1 had latency of 35us. 

2) Microseconds matter. Exchange latencies are now in single-digit-microseconds. For wireless equipment, nanoseconds matter (since its multiplied by number of repeaters).

3) I understand the words, but they do not make sense, it looks like something generated by a markov chain.

4) You are simply wrong.  


trader1's picture

this info will excite some ppl