The Basics of Low-Latency Optimization for Traders

THE BASICS OF LOW-LATENCY OPTIMIZATION FOR TRADERS PRICE DATA EXECUTION PLATFORM Choice of a third party platform for low-latency trading depends widely on the structure and markets of a paticular trade. OPERATING SYSTEM Optimizing an operating system for maximum transaction speed involves removing all unnecessary functionality and interface detail, so as to allow the hardware to dedicate its speed to executing transactions. HARDWARE On a stripped down, barebones OS, the most successful traders typically use a hardware setup that consists of the most expensive processor on the market. Costs for a single server can easily reach more than 20,000 USD. LOCAL NETWORK INFRASTRUCTURE Leading vendors such as Cisco and Arista provide the latest technology, which we use to ensure that our exchange connectivity is always provisioned at the highest possible speed. WIDE AREA NETWORK Dedicated network connections between data center co-locations are the best way to ensure market executions you perform have the best possible latency. ED&F Man has co-located data facilities at seven exchange markets around the globe. In the time it takes a typical Internet connection to route an order to an exchange, a private circuit could have routed the same transaction several times over. With market price fluctuations happening continuously, having this speed advantage can be make or break in a trade being profitable or a loss. EXCHANGE MATCHING ENGINE 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. ORDER TRAFFIC ED&F Capital MAN Markets EST. 1783 www.edfmancapital.com/infrastructure/ %24