how to significantly reduce the latency gap with HFTs

[mmt]

I am trading with TT's ADL/Autospreader. I co locate via my FCM in Aurora.
During fast markets I'm often getting picked-off. Is there a way to greatly reduce the latency gap I have with HFTs.

Any help from people with knowledge in this area will be greatly appreciated.

 

[Gambit]

Contact advantage futures. Or PM me. I know a few people who can help you and it may be within your budget.

 

[syswizard]

Better make a cost/benefit assessment first. It might cost you more to colocate than the profit loss from high latency.

 

[marketsurfer]

I am trading with TT's ADL/Autospreader. I co locate via my FCM in Aurora.
During fast markets I'm often getting picked-off. Is there a way to greatly reduce the latency gap I have with HFTs.

Any help from people with knowledge in this area will be greatly appreciated.

Might as well take an expensive stick to a gun fight-- --

 

[syswizard]

Might as well take an expensive stick to a gun fight-- --

re: "I'm often getting picked-off."
Surf - he may or may not benefit from lower latency as the higher latency may also be keeping him out of some losing trades.
This is very hard to quantify. He won't know until he makes the move.

 

[garachen]

There is some advantage to being on the fastest non-direct setup possible but you'd have to know where to apply it. It probably is not going to prevent you from getting 'picked off' as the person doing that is almost 100% certain to have invested heavily in speed.

With TT/ADL you should be looking to work on 'cleverness' rather than speed - make your money competing in that space.

 

[mmt]

I am a profitable trader. I do assess costs and benefits of new software, colo, and etc.
I am always looking to work on cleverness.

But, I am hoping to get some help in regards to latency.
Help in this area will be greatly appreciated.

 

[IAS_LLC]

re: "I'm often getting picked-off."
Surf - he may or may not benefit from lower latency as the higher latency may also be keeping him out of some losing trades.
This is very hard to quantify. He won't know until he makes the move.

Most of the CME markets have a FIFO fill policy, so he COULD (i do) model latency in his backtest fill model if he has full tick level book data.

 

[garachen]

I am a profitable trader. I do assess costs and benefits of new software, colo, and etc.
I am always looking to work on cleverness.

But, I am hoping to get some help in regards to latency.
Help in this area will be greatly appreciated.

What is your current internal latency? I'm guessing 300 mics? Depends on your route to the TT Gateway. Let's say the fastest you can get without going direct is about 80 mics. It won't cost you much to get to that speed, you just have to find someone who knows what they are doing. From my experience though, you aren't really going to see improvement in your problem with adverse selection. They guy picking you off is almost certainly below 5 mics and - depending on the product - could be 1-2 mics. It's the same guy who picks everyone off.

 

[mmt]

I believe most off the self options market making software can hit below 100 micro seconds and they have been able to for while.
Now, the way I spread with TT is slow. I understand, even if I got to sub 15 micro seconds, there are going to be people faster. Therefore they can still pick me off.
However, I will be able to trade more strategies / markets profitability.