alt Hacker NewsThe Miami stock exchange (MIAX) has their matching engines colocated in Equinix's NY4 data center in Secaucus NJ, much like many other exchanges. I would not be surprised if TXSE does the same.
Many trading firms already have their trading engines in that data center and I would assume TXSE would want quick access to that order flow and this might be easier if they are in NY4.
Of course, they may want to have their colo facilities in TX in their own data center, that way they can rent out space and make some extra revenue, but then they'd have to build that out.
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From: https://www.txse.com/trading-membership
> TXSE’s primary matching engine is located in Equinix NY6 in Secaucus, NJ, with latency equalization across NY4, NY5, and NY6. Customers outside these buildings will experience additional latency. The disaster recovery (DR) matching engine is hosted in Equinix DA11 in Dallas, TX.
> Customers may connect to DR either directly to DA11 or through TXSE infrastructure at 350 E. Cermak in Chicago. Cermak connections will have traffic backhauled to DA11 over redundant TXSE circuits. Backhaul from Cermak to the production data center is not available.
If anything they will build a backup DC in Texas so they can hold that over NJ in case the local government starts talking about transaction taxes again. The CME is currently building a “backup” private Google Cloud datacenter in Dallas.
I think the ‘Texas’ part in the TXSE is mainly from a business procurement pov. They’re hoping to capitalize on the recent growth in the area, which is possibly ripe for a lot of new listings. The actual electronic trading might still originate in NJ.
I don’t believe they’ll have a floor. I think they are going the NASDAQ route, unless I’m confusing them with Long Term Stock Exchange (I was researching both around the same time).
Take the above with a heap of salt. It’s part my intuition and part things I might have read on the internet (including their corporate site).
I would rather see an exchange that requires buyers to hold their shares for at least x days or weeks, and slow everything way down so that people are actually forced to make decisions based on fundamentals rather than trading based on jitters in market movement. Then the datacenter location is almost irrelevant.
TXSE has also made overtures about putting live trading in New Jersey like everyone else, but they may be putting their back-end in Texas.
They have job postings that include NYC-based network operations engineers. https://www.txse.com/meet-the-team#careers
Couldn’t they just send some hardware down Texas to co-locate there (presuming specialist hardware) and add another deployment target for their software? Would it be that hard?
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> I would assume TXSE would want quick access to that order flow
Perhaps Texas could use a different trading model that doesn't require ultra high speed trading.
Matt Levine often mulls the idea of a system with a trading window that doesn't let the fastest connection to the order book win. Perhaps an order book that works at human speeds so humans can trade too (I can think of a few ways to do it - but would need modelling to try and figure what actually works). He points out that most trades are done in the last hour, so really trading only needs to occur once a day.
The issue is whether a market trading system can be designed with suitable restrictions that beats the current market design (for listed companies and for traders).
Designing markets is hard because you have to assume every player is selfish and only cooperates where it is to their benefit and will defect or cheat if the incentives of the market encourage that (Enron in the California energy markets).
Unlikely since SEC would need to approve of a different system of market trade incentives.
Edit: Personally I would like to see an exchange that was more international. I'm from New Zealand and our good businesses often list on the Australian exchange rather than the NZSX. The system of ADRs for other countries feels like a massive hack.