SIX Swiss Exchange Launches Microwave Trading Service

SIX Swiss Exchange announced on Wednesday that it has started using microwave-based trading connections in Europe. The Zurich-based stock exchange launched the service in partnership with 12 Horizons, a microwave solutions provider. The two firms have formed a joint venture, 12H AG (12H), that will be responsible for providing microwave trading capabilities to traders.

Although fiber-optic cable is usually thought of as providing the fastest online connections, microwave technology is twice as fast. The technology isn’t new - the first microwave transmission took place in 1931 - but in recent years traders have managed to harness its power for high-frequency trading (HFT).

By using microwaves, traders can cut a few milliseconds off of their execution times. Not much for the layman but a huge amount for those engaging in HFT. Traders want to take advantage of lightning fast price fluctuations so speed is of the essence. SIX also claims that using their technology will improve Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term, tighten spreads and enhance Risk Management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term capabilities.

SIX is now the first exchange in the world to operate and own a European microwave trading network. The exchange’s system will connect Zurich to London, Milan, and Frankfurt. It will also connect Milan to London and Frankfurt. 12H will be responsible for providing the technology that supports microwave trading but SIX will manage all customer relationships related to the service.

Commenting on the new service, Thomas Zeeb, SIX’s Head of Securities & Exchanges, said: “Introducing microwave technology represents a significant step towards creating the exchange services of the future and our strong commitment to provide customers with a single source for the best low latency services from and to Zurich.”