ED&F MAN CAPITAL MARKETS

HOSTING AND INFRASTRUCTURE

THE BASICS OF LOW-LATENCY OPTIMIZATION FOR TRADERS

01ED&F Man Capital Markets Hosting & Infrastructure Services

TIME IS MONEY – LOW-LATENCY OPTIMIZATION FOR TRADERS

In electronic trading, how fast you are to the market

only matters in relation to how fast everyone else is –

the first in line gets what they want! The time it takes

for a trader to receive the price is as important as

the time it takes for the order to be delivered. The

time to market is measured in milli-, micro-, and

nanoseconds.

The path between an execution platform and an

Exchange’s matching engine is made up of many

layers of hardware infrastructure and network

connectivity. In order to understand how to make

this path shorter, each layer needs to be reviewed

and understood together with how much it costs to

optimize, both in terms of time and money - the goal

is to get as close to the market as possible by

eliminating as many hops in the middle of the path.

There are a number of factors that can impact the

time it takes for order messages and price data to

move in-between an electronic trading platform and

a Financial Exchange’s matching engine; the path

between the two is made up of six layers:

• Execution Platform

• Operating System

• Computer Hardware

• Local Network Infrastructure

• Wide Area Network

• Exchange Matching Engine

Each one of these layers presents its own

challenges and set of factors that need to be taken

into account; each requires a unique skillset.

The proximity hosting services provided by ED&F

Man Capital Markets are backed by an experienced

application support team with experts in network

design, server configuration and deployment,

exchange interfaces, market data services,

low-latency optimization and industry standard as

well as proprietary trading platforms all backed by

an enterprise level of IT and Trading support. By

combining all of these elements in a single place,

we enable our clients to harness all elements of the

low-latency optimization path.

02ED&F Man Capital Markets Hosting & Infrastructure Services

PRICEDATA

Trading Application

Operating System

Local NetworkInfrastructureWide Area Network

Exchange Matching Engine

Computer Hardware

ORDERTRAFFIC

03ED&F Man Capital Markets Hosting & Infrastructure Services

Choice of a third party platform for low-latency

trading depends widely on the structure and

markets of a particular trade.

EXECUTION PLATFORM

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.

EXCHANGE MATCHING ENGINE

CLICK HEREto download the White Paper or contact the ED&F Man Capital Markets Hosting &

Infrastructure services team.