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The Basics of Low-Latency Optimization for Traders

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ED&F Man Capital Markets is a global financial brokerage business and the financial services division of ED&F Man. To learn more, visit our website - http://www.edfmancapital.com/infrastructure/corporate-information/news/

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The Basics of Low-Latency Optimization for Traders

  1. 1. ED&F MAN CAPITAL MARKETS HOSTING AND INFRASTRUCTURE THE BASICS OF LOW-LATENCY OPTIMIZATION FOR TRADERS
  2. 2. 01ED&F Man Capital Markets Hosting & Infrastructure Services TIME IS MONEY – LOW-LATENCY OPTIMIZATION FOR TRADERS In electronic trading, how fast you are to the market only matters in relation to how fast everyone else is – the first in line gets what they want! The time it takes for a trader to receive the price is as important as the time it takes for the order to be delivered. The time to market is measured in milli-, micro-, and nanoseconds. The path between an execution platform and an Exchange’s matching engine is made up of many layers of hardware infrastructure and network connectivity. In order to understand how to make this path shorter, each layer needs to be reviewed and understood together with how much it costs to optimize, both in terms of time and money - the goal is to get as close to the market as possible by eliminating as many hops in the middle of the path. There are a number of factors that can impact the time it takes for order messages and price data to move in-between an electronic trading platform and a Financial Exchange’s matching engine; the path between the two is made up of six layers: • Execution Platform • Operating System • Computer Hardware • Local Network Infrastructure • Wide Area Network • Exchange Matching Engine Each one of these layers presents its own challenges and set of factors that need to be taken into account; each requires a unique skillset. The proximity hosting services provided by ED&F Man Capital Markets are backed by an experienced application support team with experts in network design, server configuration and deployment, exchange interfaces, market data services, low-latency optimization and industry standard as well as proprietary trading platforms all backed by an enterprise level of IT and Trading support. By combining all of these elements in a single place, we enable our clients to harness all elements of the low-latency optimization path.
  3. 3. 02ED&F Man Capital Markets Hosting & Infrastructure Services PRICE DATA Trading Application Operating System Local Network InfrastructureWide Area Network Exchange Matching Engine Computer Hardware ORDER TRAFFIC
  4. 4. 03ED&F Man Capital Markets Hosting & Infrastructure Services Choice of a third party platform for low-latency trading depends widely on the structure and markets of a particular trade. EXECUTION PLATFORM Although the speed at which information can be received and decisions made can be optimized, the distance that signals must travel can introduce significant delays, to which the only solution is to ensure that your servers are as close to the market exchange as possible. EXCHANGE MATCHING ENGINE CLICK HERE to download the White Paper or contact the ED&F Man Capital Markets Hosting & Infrastructure services team.

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