On the Feasibility of Laser Inter-satellite Links for Low-latency High Frequency Trading

Abstract

Internet satellite constellations are proliferating and enabling new applications in long-range and large-scale connectivity. One such promising application is providing low-latency communication for high frequency trading by leveraging their global coverage. While existing approaches leverage higher orbit satellites as low-latency relays for private clients, there is a new opportunity that can provide low-latency connectivity to every customer via the satellite mesh – laser inter-satellite links (LISLs).While past research has explored the capability of LISLs for enabling physical deployment and impact on the constellation topology design, this work presents a holistic empirical study on the feasibility of leveraging LISLs for low-latency high frequency trading. We evaluate the feasibility, utility and practical limits of the latency benefits of LISL-based constellations for ten large and geographically diverse financial markets across over 150 million satellite-seconds of simulation. Our empirical evaluation across two of the largest proposed satellite constellations, Starlink and Project Kuiper, demonstrates that LISLs can provide full coverage with roughly 1000 satellites and improve latency for 78.76% of link-pairs. However, these benefits decline drastically with processing delays of 4 ms to roughly 19.05% of link-pairs.