Quincy Data, a provider of low latency market data, and its partner McKay Brothers, a developer of microwave networks spanning key financial centres, have come a long way in the short time since they were set up in 2010, but they have further to go with plans to build out additional connectivity and enhance their market data services.
The companies were established by co-founders Stéphane Tyč and Bob Meade, who first met at Harvard University where they were studying for a PhD in physics. Their career paths moved on in parallel in France and the U.S., with both continuing physics research, Tyč at Thales and Meade at MIT, before spending some years as traders in capital markets. They came together again in 2010, first setting up McKay Brothers – named after the lab they worked in at Harvard – and then Quincy Data.
Tyč explains: “Our first mission was to create a network and then trade over it ourselves, but that is what many people that build networks do and was not unique. We realised we didn’t have the resources to build a network and trade, so instead decided to build products and services fit for trading. We decided we would never compromise on latency and our number one goal was to offer the fastest networks in the market.”
McKay’s first microwave network went live in July 2012 connecting the Chicago Mercantile Exchange’s data centre in Aurora, Il west of Chicago to Equinix’s NY4 in Secaucus, NJ. It supported customer trading at latencies substantially lower than the fastest fibre optics and attracted around 10 latency sensitive clients. Tyč comments: “This delivered a speed change to the market, clients were waiting for us to turn it on. The bandwidth of the circuit was fairly small so it just carried trading signals.”
The company’s second circuit went live in December 2012, covering the same route but differing significantly from the first. While the first circuit is dedicated to private trading use, the second provides a conduit for the Quincy Extreme Data (QED) Service that offers financial market data to clients at extremely low latency.
The service started with a select subset of market data from the CME, CBOT, Nymex and Comex exchanges, with the network initially carrying the market data from Aurora to NY4. The network has since been augmented with stretches from Aurora to the Nasdaq OMX data centre in Carteret, NJ; the Halsey data centre in Newark, NJ; the 360 East Cermak centre in Chicago and, most recently, the Equinix LD4 data centre in Slough, to the west of London. Local links connect Halsey to Secaucus, Carteret to Halsey and Carteret to Secaucus. The latest one-way latency figures posted by Quincy for the QED Service are:
Aurora – Secaucus: 4.13 ms
Aurora – Carteret: 4.11 ms
Aurora – Cermak: 185 μs
Aurora – Halsey: 4.11 ms
Aurora – Slough: 36.40 ms
Halsey – Secaucus: 37 μs
Carteret – Halsey: 68 μs
Carteret – Secaucus: 103 μs
With these connections up and running, McKay is about to go live with a microwave link from Carteret to Weehawken, the New Jersey home of Bats Global Markets. It is also building connectivity from the NYSE Mahwah, NJ data centre to Carteret and NY4, as well as a long haul connection from Mahwah to Chicago.
As well as additional network connections, Quincy has added highly liquid Nasdaq-listed ETFs to the QED service, delivering the most liquid equity ETFs sourced from Carteret to Aurora. ETF data is also available over Quincy’s New Jersey metro microwave service connecting Carteret and Secaucus, and soon Weehawken and Mahwah. With limited bandwidth, Quincy is also refining QED market data content on the basis of client feedback.
Quincy QED customers can buy as much or as little market data as they want at collocation facilities of their choice. Tyč says: “The big thing here is that it is the first time someone can buy a link that is the fastest and is publicly available. This is new for the market as links were previously owned by trading firms and market data was not delivered over the fastest link. We publish our latencies and are transparent in an otherwise cloak and dagger world.”
Quincy’s next priorities are the New Jersey short links and more links in Europe. The company crossed the Atlantic in May 2013, adding the LD4 collocation centre to its list of distribution sites. The underlying network combines fibre from Level 3 and microwave from McKay to deliver select CME data in 36.40 milliseconds.
Quincy’s first network within Europe will offer low latency delivery of trading signals and market data from LD4 to Eurex in Frankfurt, although the company declines to say when this will go live. It is also considering intra-London connectivity.
McKay’s microwave equipment comes from Aviat Networks, a neighbour in California. Quincy leverages FPGA-based datafeed handling technology from Enyx for its CME data, and a comparable offering from NovaSparks for its Nasdaq-sourced data.
As McKay and Quincy approach the end of their third year in business they can jointly celebrate about 30 clients, most using both McKay and Quincy products. The companies face two types of competition: private networks that are probably the biggest threat in terms of latency quality, although numbers are rarely revealed; and public offers of market data services such as Nasdaq’s CME to Nasdaq route that is delivered by Strike Technologies using equipment from Cielo.
Supporting Quincy’s ongoing goal of being the fastest network provider in the market, Tyč concludes: “We don’t see much competition in the long haul market and in the short haul market only a few companies are like us in using microwave and millimeter wave technologies.”