Architects of Electronic Trading: Technology Leaders Who Are Shaping Today's Financial Markets

CHAPTER 4

Hardware Acceleration with FPGAs

Rapid advances in technology are forcing all firms to quickly adapt to remain competitive; high-frequency market participants are no exception. For these firms, the democratization of certain technologies has rendered them ineffective for extremely latency-sensitive strategies. Firms in this category are well aware that any speed advantage is relatively short-lived and are actively engaged in R&D to find the next source of a speed edge. In the recent past, high-frequency firms pioneered the application of hardware acceleration, which is the use of faster hardware to perform certain functions that were traditionally performed by slower software, to achieve minimum latencies. In this chapter, the focus is on hardware acceleration, which is attracting considerable attention throughout the marketplace.

The popularity of FPGAs (field programmable gate arrays), which allow programmers to develop custom hardware to solve specific problems, is on the rise across a variety of industries. Consequently, processes are speeding up. As the use of FPGAs becomes more widespread, financial firms increasingly recognize the benefits of these customizable chips. FPGA technology offers firms a cost-effective means to rapidly adjust their technology to address changing market conditions.

As in the case with graphical processing units, FPGAs offer an increase in processing power. Different from GPUs, which are available “off-the-shelf,” the advantages of FPGAs ...