Trading is a place where the primary target is to make profit. Today, with all the technological advancements, these trading firms have penetrated the market better. And, one of their main weapons is low-latency networks. A high-speed network to carry out trading operations is the need of the hour. The game-changing low latency systems have made it possible to trade lightning fast and bag maximum profit.
To keep things in sync, Orthogone low latency trading system design is proving to be a game-changer for trading firms and helping them grow with better profit margins.
Low latency networks in trading
The concept of HFT or High-Frequency Trading completely runs the finance and trading market. Low latency is essential to achieve this high frequency while trading and dealing with the cryptic system of stocks. HFT is an integral part of the global stock market these days since it is responsible for around 50% to 60% of all trades.
HFTs require secure and extremely fast networks to carry out these huge trading operations. Low latency is a must to achieve these fast networks and data-transferring options. One of the main reasons why trading operations require high-frequency networks is to reduce the overall response time for a particular process or request. The need to taking decisions quickly and accurately is key for the stock market to perform properly. This can only happen if data transmission is done without any hazards or hindrances.
Three target causes of latency
Network providers of low latency systems are targeting the three basic causes of latency to solve the issues.
- Transmission lines- Latency is a huge issue when it comes to transmission lines. High-end trading operations require data to be transmitted quickly. The use of optical fibres is currently being replaced with microwave links. Constant research has stated that microwave links transmit data quicker and safer than other methods. Thus, network providers are installing microwave links to achieve a low latency rate.
- Proximity- HFT firms are looking to build their facilities closer to data centers to reduce the latency rate. Proximity is the closeness between the server and the client systems. The lower the distance between these two points, the lower the latency rate.
- Transmission equipment- Transmission equipment plays a key role in determining the latency rate. Network providers are building efficient methods to increase the number of packet switches and reduce the number of data points to lower the latency and increase the transmission rate.
