low latency trading

The Role of Lower Latencies in Modern Trading

Every person, who works in the banking and financial sectors, can certify that the speed of execution is everything when it comes to achieving favorable investment results. One might have heard the old saying that time can be measured in any particular currency. It is more than true for the world of high-end trading companies.

If the competition gets a hold of valuable information mere seconds or even millisecond ahead of one’s very own firm, then they will place a trade faster and get increased earnings. This is something that reliable investment tools like the Tesler App System are already taking into account.

Good to Know:

Low latency is a major factor in the capital markets. Official statistics state that a delay of a single millisecond may bring forth losses of up to $100,000,000, depending on how big the given institution is. When the importance of the speed of trade executions is even higher, it is referred to as ‘ultra-low latency’.

Factors That May Impact the Speed

Digital trading solutions might have made it easier for regular people, who don’t have a professional background in investment, to operate in the markets but this is not true for the creators of such software. The same is valid for high-end Wall Street firms and banks.

It is better to be an end user and take advantage of an already working auto-pilot system like the Tesler App Software. Software developers, designers, and expert financiers sometimes do not have enough time left for their family and friends due to the fact that they are testing technical analysis patterns 24/7.

There are several factors which may have a serious effect on the trading software whose job is to predict asset price movements. Some of them are:

  • The Physical Distance Between the System& the Exchange;
  • The Physical Distance Between 2 Different Trading Venues (Especially for Arbitrage Strategies);
  • The Type of Architecture Utilized by the Trading System;
  • Applied Operational System (OS);
  • Computer Codes’ Advancement Level;
  • Type of Programming Language;
  • Type of Cabling (Whether it is an Optic Fiber or Microwave);
  • Utilized Network Adapters;

Interesting Fact:

It is important for companies that engage in low-latency trading to locate their physical servers right next to the investment department. This would further improve speed and eliminate the odds of accumulating losses. Most high-frequency trading establishments comply with this unwritten rule.

An Illustration of How Low Latency Works

Financial terms might be tough for most people to comprehend because they are used to relying on investment systems such as the Tesler App. Here is a basic scenario of how low latency influences trading. A particular crucial event needs to occur somewhere around the world.

It can be anything from a change in the political system of a given country to the release of the new iPhone. The information about it is then uploaded to the Internet. This data then falls under the radar of the programming algorithm of the trading application. It issues a prediction which is delivered to the respective person. The investment order is then placed.

Low Latency Principles are Everywhere in Modern Trading!

The contemporary investment sphere applies low latency techniques nearly every time when a trade has to be placed and executed. It is no surprise that auto-pilot systems are so popular among end users. Financial institutions also sometimes rely on them to get faster and more accurate results.