Nasdaq Offers Deep Discounts on Co-Locating Order Engines
January 14, 2013
Competition to have trading firms locate their order engines under the same roofs as exchanges’ matching engines has ratcheted up with Nasdaq OMX’s announcement that it is offering a discounts of up to 50 percent for new “co-located” cabinets ordered in the first quarter of this year.
Price cuts for co-location services at the Nasdaq OMX Carteret, N.J., data center will range from 38% on monthly recurring costs for Super Cabs to 50 percent monthly recurring savings for low- and medium-density cabinets. Nasdaq defines density as the amount of power needed to power and cool cabinets.
Nasdaq's cabinet rates:
Low Density $4,000 $2,000 50%
Medium Density $5.000 $2,500 50%
Medium-high Density $6,000 $3,500 42%
High Density $7,000 $4,500 36%
Super Cab $13,000 $8,000 38%
“They’re offering a sale for new cabinets and trying to lure more people in,” says Alexander Tabb, a partner with the Tabb Group. “And once they get them in, they’re not going anywhere.”
Nasdaq has also made a number of significant moves in upgrading its co-location services. It now provides 10 gigabit a second and 40 gigabit a second Ethernet access to all Nasdaq OMX markets at the Carteret center. The exchange operator has beefed up its pre-trade risk management capabilities with, for example, its purchase of the Smarts Group, a market surveillance systems provider.
”There’s a lot more concern about risk and security among a clients than there was a year or so ago,” says Ted Myerson, Global Head of Access Services at Nasdaq OMX.
Access Services generates $200 million annually, Myerson says.
Nasdaq is offering co-location as part of its Access Services business which also includes front end risk management, compliance tools, reporting tools, post trade regulatory proceeds, finger printing and FinQloud.