“You only need to be a tiny bit faster than the other guy,” Kevin Formby, Endace VP says. Endace is an Atlanta-based contractor that captures and analyzes network traffic in order to evaluate the trading performance of their clients’ platforms.
It takes 300 milliseconds to blink an eye. A price tick takes less — only 16.5 milliseconds — to get from New York to Chicago and back. One-way takes only 7 milliseconds.
Spread Networks Inc., a privately held telecommunications provider, announced it had set a round trip speed between New York and Chicago of under 13.33 milliseconds.
BATS Exchange, which claims to have the lowest latency numbers in the industry, boasts an average order lifetime of 8 milliseconds. BATS says a 99.9 percent “fill,” which includes the time to accept, process and acknowledge a member order, takes no more than 1.3 milliseconds.
Small wonder trading firms now are looking for microseconds of advantage.