Definition: Spread Networks

An organization that offers the fastest speed between the Nasdaq datacenter in Carteret, N.J. and the Chicago Mercantile Exchange. Customers of the company are Wall Street firms that look for tiny discrepancies in prices between the two exchanges so they can buy low and sell high in a split second (see high-frequency trading).

Founded by Dan Spivey and funded by former Netscape CEO James Barksdale, a fiber optic line was laid between both exchanges. In 2010, the service was launched that transmits data in a 14-millisecond round trip. The 827-mile line was carved through mountains, roads and private properties requiring hundreds of rights-of-way to provide the straightest line possible between the two points. An additional connection point was later added in Cleveland.

In 2017, Spread Networks was acquired by Boulder, Colorado-based Zayo Group, which specializes in network and cloud infrastructure.

The Whole Story

In his 2014 book, Michael Lewis explains how the entire stock market is rigged in favor of computerized trading. He covers the Spread Networks project in great detail.