High-Frequency Trading, I’m sure you’ve heard that before – but a common misconception is that this kind of trading is only possible by large corporations or hedge funds.
Well, that’s completely wrong – because today we’re going to show you a custom server that we’ve made specially for HFT trading under just 3 Lakhs of investment.
But before that, let’s understand what exactly is High-Frequency trading.
it comes under Algorithmic Trading – which means no human is involved in the process of buying or selling the stock options, it’s completely automated by implementing very smart strategies that let the computer decide which trades can make a profit for their user.
Now if you’re an Intra-day trader, you might make 3,4 or maybe even 10 trades in a single day – But HFT algorithms, as the name suggests, can make 100s or even 1000s of trades in less than a single second. How’s that even possible?
Well, the technical answer is that these servers are actually deployed in NSE data centers where they have an extremely low-latency & high-speed connection to the trading centre.
Which is why you can see that this PC is actually built in a really compact 2U server chassis, because a bigger chassis will mean a higher rent that you’ll have to pay at the data-center.
Now, keeping the technical things aside – let’s talk about how this AI based algorithm can even make profit out of these 1000s of micro-transactions – It’s because HFT uses very different strategies as compared to regular trading.
For example – the most common is Price Arbitrage, so most stocks have a very small price difference in different markets like BSE & NSE – so these models find and sell these stocks from one market to another for a very small profit.
So even though a single trade might not make you any profit – doing it over 1000 or 10,000 times, ends up making you a lot of money.
Another example is news based trading – so here, the AI model will actually keep scanning through all the news channels & websites to find negative keywords related to public companies – based on this information, it can short sell their stocks and make a profit.
Similarly it also looks for positive keywords, and start trading those particular stocks..
So HFT is actually a brilliant way to build a strong passive income stream if you’re a Stock Trader or a Developer.
If you’re a Developer – you can build your own AI models, but if you’re a trader – you can simply install pre-made AI models from the Internet, some examples are on your screen.
But either way, you will need a High-Performance Computer to run these AI models – like this one behind me.
And now, you might think – oh! These servers might be really expensive, but the truth is you can build an HFT PC starting at just 2-3 lakhs of investment.
So let’s talk about the Hardware Selection for a HFT server.
Now, most servers for AI actually use high-end GPUs for training and running the AI models. But we will suggest that you don’t take a high-end GPU. because AI models that are trained on CPUs are almost 2x times more accurate than GPUs.
And for everyday tasks – the lower accuracy of GPUs isn’t a big problem, but for financial & trading models, where even a small mistake can lead to huge losses – you’d want your AI to be as accurate as possible. Even if the training takes a much longer time.
So get a CPU, which has the best Multi-Core performance in your budget – and in this build – we have the i9 14900K which has 24 cores & 36 threads. if you have a higher budget – check out the Threadripper series from AMD which can go all the way upto 96 CORES!
The second +point of Choosing a CPU over a GPU is the RAM capacity – which is the second most important component for an HFT PC. With GPUs you are limited with the amount of VRAM of that particular GPU – you’ll get 48GB at max, and even that will cost you easily above 6 lakhs.
But this system has 128GB of RAM – and more RAM simply means your AI model is more smart because of a higher parameter limit. and with the latest ThreadRipper 7000 series, the RAM capacity can go all the way upto 4TB!
After you’ve decided the CPU & RAM. then you can start thinking about your GPU.
So the GPU will not have a lot of work – except for attaching displays to your setup. But that’s not really expensive – as even the most entry-level GPUs like RTX 3050 or even ARC A380 can support upto 4 displays per card.
Now, tabout the final main component of this build – the server chassis. Like we said earlier, HFT servers cannot be used at your home – for the best performance and returns, you’ll have to co-locate this server at the NSE datacenter, which have really high rental costs.
And building a full-fledged HFT pc, in such a compact case is really difficult. Because the biggest problem becomes thermal management. High-End CPUs produce a lot of heat, which is why we’re using this custom-built liquid cooler that fits in a 2U server.
And that ends up saving our client – more than 4 Lakhs a month in just rental costs.
So hopefully, this video guides you to pick the right hardware for building a HFT PC or server.
Now, if you’re not up for all the hassle of finding the right hardware you’re already at the right place – visit our stores in Gurgaon, Bangalore, Hyderabad, or Mumbai or Visit our website for a Free Consultation as we ship High-Performance Computers across India
