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Latency describes how long it takes for data to move from one end of the network to the other. Fast speeds, provided by
low latency routes, usually bring enhanced profitability and competitive edge, which is why traders spend heavily to obtain
the quickest hardware, software and data lines. This infographic looks at latency in more detail.
One Connection - A World of Opportunities
THE QUEST FOR LOW LATENCY
What is the biggest determinant of latency?
How far the signal has to travel or the length of the physical cable that carries data from one point
to another
Is that why co-location can
be so beneficial?
How many layers are there between a trading platform and an exchange? *
Does location within
an exchange’s
co-location
site matter?
Yes, if your servers are housed within an
exchange, you should benefit from much
lower latency than a firm that is miles away
No, organizations receive the same
length of cable, regardless of their
location within the premises, giving
them the same latency
LOW LATENCY
Local network infrastructure
The key factor here is bandwidth, with the fastest
local networks today achieving between 10 and
100 gigabits-per-second
Wide area network
A private circuit can route an order to an
exchange several times faster than the usually
slower and less reliable internet
Exchange matching engine
Here, trades are matched, orders filled and price
messages generated - ensure your servers are
as close to exchanges as possible
Execution platform
If you buy, rather than build, consider suitability
for your trades’ structure and markets, plus
optimizing application settings and workspace
Operating system
Ensure you remove all unnecessary functionality
and interface detail, so hardware can focus solely
on executing transactions quickly
Computer hardware
Faster is more expensive - the most successful
traders typically use the priciest processors and
their servers often cost over $20,000
The path between a trading platform and exchange typically contains six layers:
10-100
Gbps
*The Basics of Low Latency Optimization for Traders, ED&F Man Capital Markets Hosting and Infrastructure

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New Infographic - The Quest for Low Latency

  • 1. Latency describes how long it takes for data to move from one end of the network to the other. Fast speeds, provided by low latency routes, usually bring enhanced profitability and competitive edge, which is why traders spend heavily to obtain the quickest hardware, software and data lines. This infographic looks at latency in more detail. One Connection - A World of Opportunities THE QUEST FOR LOW LATENCY What is the biggest determinant of latency? How far the signal has to travel or the length of the physical cable that carries data from one point to another Is that why co-location can be so beneficial? How many layers are there between a trading platform and an exchange? * Does location within an exchange’s co-location site matter? Yes, if your servers are housed within an exchange, you should benefit from much lower latency than a firm that is miles away No, organizations receive the same length of cable, regardless of their location within the premises, giving them the same latency LOW LATENCY Local network infrastructure The key factor here is bandwidth, with the fastest local networks today achieving between 10 and 100 gigabits-per-second Wide area network A private circuit can route an order to an exchange several times faster than the usually slower and less reliable internet Exchange matching engine Here, trades are matched, orders filled and price messages generated - ensure your servers are as close to exchanges as possible Execution platform If you buy, rather than build, consider suitability for your trades’ structure and markets, plus optimizing application settings and workspace Operating system Ensure you remove all unnecessary functionality and interface detail, so hardware can focus solely on executing transactions quickly Computer hardware Faster is more expensive - the most successful traders typically use the priciest processors and their servers often cost over $20,000 The path between a trading platform and exchange typically contains six layers: 10-100 Gbps *The Basics of Low Latency Optimization for Traders, ED&F Man Capital Markets Hosting and Infrastructure