Nanoseconds for All? UBS BizDev Says HFT Will Diffuse to Asset Managers (when do mom and pop go low latency?)

From Traders Magazine:

UBS' Matt Senecal and Hyannis Port's Tony Amicangioli predict the spread of high-speed trading to asset managers

Matt Senecal is head of business development for electronic trading at UBS. Tony Amicangioli is a founder, president and chief executive at technology vendor Hyannis Port Research. The two companies recently partnered to make Hyannis Port's risk management software available to UBS's high-frequency black-box customers. Both executives believe such speedy technology will become more ubiquitous in the future, leveling the playing field for certain institutional customers. Traders Magazine caught up with Senecal and Amicangioli recently.

Traders Magazine: High-frequency trading for the masses?

Amicangioli:HPR believes very strongly that in the next one to five years, there will be a commoditization of low-latency technology. A recent TABB piece notes the difficulty HFT-only shops will face trying to make money on performance-only strategies. They're in a race to achieving nearly zero gain in alpha.

Traders Magazine: So less expensive technology will lead to it becoming more widely available?

Amicangioli:Like any technology, it is initially available to the top players. But over time it tends to become more ubiquitous. We believe that some of the larger ultra-low-latency-centric funds will start to look more like traditional hedge funds and vice versa. The traditional hedge funds are increasingly asking about high-performance, low-latency capabilities, while our information suggests the latency-centric shops are recognizing the need to diversify beyond latency-only strategies.

Senecal: If you look back five years ago, very few of the brokers had their smart order routers or algo engines co-located in a data center. And now virtually everybody-certainly the Tier 1 brokers-does. That's the new normal. You want to be as close to the matching engine as possible when making your trading decision....MORE

Since the Obama Executive Order making everything machine readable I suppose it's only a matter of time before Grandma starts moving markets with her recipe files.