June 3rd, 2008, 4:15 pm
trying to get a general feeling of how important this latency factor is for the high-frequency statarb guys. Reason for asking is that i have recently met with a unnamed but rather well established statarb fund who claims that PMs don't care about latency, in fact they do not have any servers at the exchange floors and could not care less about it alltogether, at the same time they have a very sophisticated t-cost model. Here are the questions:a) could it be that the marketing guy does not have a clue what he is talking aboutb) if that is indeed true, what's the downside of having servers at the exchange floor, my understanding is that it is not lavishly expensive, so why would you not want to do that, i.e. put your server very close to be able to execute with a minimal latency esp. if you are running a high-frequency shopAppreciate any thoughts.Ev