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700 metres equates to a difference in the one way trip time of about 5 microseconds, the velocity of light in glass being about 1.5 x 108 metres per second, about half its velocity in free space.)
Spenceley said that minimal latency was critical for automated high frequency trading, which now accounts for about 60 percent of all trades.
He told iTWire that he had got the inspiration to build the link from US company, Spread Networks. It spent an estimated $US300m to build a link between Chicago and New York by the shortest possible route.
Meanwhile another company, McKay Brothers is planning a microwave link over the same Chicago- New York route. It would halve the trip time compared to Spread Networks' fibre.
One commentator on the Vocus cable said: "We worked with several HFT (High Frequency Traders) in the US and they will 'sell their grandmother's left arm' for a microsecond. It turns out that in the HFT world, speed of transaction is much more significant than trading algorithm, and a microsecond counts."
The CEO of Huawei Marine, Nigel Bayliff, has been reported saying "a couple of milliseconds can roll out to a $20-million difference in [a trader's] account at the end of the month."
Vocus has installed two cables across the harbour, for redundancy. Each carries 156 pairs of fibre. The fibre was manufactured in Italy but the double armoured fibre cable in Australia.
Tata announces global low-latency link
This week also Tata Communications announced a new low latency network to connect major financial capitals in Asia, the UK and USA, billing it as "the first low latency service that offers a pure multipoint ethernet platform to the financial services sector and other global industries," and saying that it will enable financial firms "to execute a high frequency trade between locations such as London and Hong Kong or New York and Singapore in milliseconds through a single network and single supplier model."
John Hoffman, Tata Communications' head of ethernet product management, said: "Global financial trading firms initially drove the need for this solution as every millisecond of latency is critical for trading. However, due to rising complexity and importance of specific mission-critical applications we are also seeing an uptake in demand for similar levels of latency from a growing range of sectors and businesses."
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