New white paper helps advisers in understanding measurement of low-latency trading

Advisers interested in the technology behind ultra-high-speed trading should take a look at a newly published white paper from exchange technology provider Cinnober. These days, developers of highly sophisticated computerized trading systems are scrambling to shave milliseconds off the time it takes to process trades. Reducing delays between a trader’s computer screen and the exchanges where the trades are made is a big deal because it makes or saves big money for the trading firms. Getting some free insight into this process is what makes Cinnober’s white paper, available on its website, intriguing. It details the factors that affect the delays, known as latency in computer-networking parlance. These factors range from hardware infrastructure to the relationship between how one measures latency and throughput (the amount of work a computer can do in a given time period). The 16-page paper also drives home the point that a precise evaluation of latency claims by vendors depends on an exact definition of the points between which latency is measured, a distinction that Cinnober contends often gets lost in the hype. Advisers will find informative tables and infographics as well as quite a few equations to help in their understanding. Cinnober’s transaction-processing technology is used in many exchanges including Borsa Italiana, the Chicago Board Options Exchange and the London Metal Exchange, among others. Not surprisingly, performance benchmarks achieved by Cinnober’s Tradexpress Trading System are highlighted in the paper but they are useful because of the explanations used to establish them. For perspective, the company hopes to achieve door-to-door trade latency of less than 80 microseconds within a year and 25 microseconds in 18 months. Visit Cinnober at this link to download the white paper. For more information please visit Cinnober’s home page.