Trading and Internet latency

N

notouch

This seems the most appropriate forum for this topic. As someone who trades the news, it's important that there is as little latency (ping times) as possible when the news goes from the news wire to my computer and again when I hit buy or sell and the order goes from my computer to my broker. So what is the best way to achieve the lowest latency? I'm in the UK and my ping time to bbc.co.uk is about 30 ms. To Bloomberg.com the ping time is 130 ms. My brokers servers are in the USA too. So in all we could be looking at a 300 ms lag - enough to make a difference.

At the moment I use ADSL but I was thinking of getting a cable connection. Would it make a major difference? I doubt it because it seems that the latency is caused by the packets going from the UK to USA which is outside of the control of the ISP. I was even thinking of moving to Japan, Hong Kong or South Korea to take advantage of their cheap fibre to the home networks, but ping times between my computer and Korea are at least 300 ms so I suspect Asia to USA ping times would be worse than UK to USA.

Any ideas about how to keep latency to an absolute minimum so that I don't lose too much of an edge?
 
Use "stop-limits" to enter your positions at news releases (bracket the pre-news price level) with a server sitting in a brokers data center in Chicago, which you remotely control from your PC in the UK.

Then you can have Anarchy in the UK! :D
 
That pre-news price straddle strategy can work well but there's a big risk of getting slipped by your broker. Is this not an issue with CME futures? I'm working on getting a market order in before the price starts moving. Internet lag would completely screw that strategy up.
 
Hey notouch,

When I was in the UK my ping times to the US weren't too bad - as long as servers were east coast (Interactive Brokers) I recall my ping time being pretty good - around the same as your ping to bloomberg.com.

What might be quite a good idea to do, is request an IP address from your broker for pings.. then go to somewhere like adslguide.org.uk and find an appropriate forum there and request help from people with ping times so you can decide what the right ISP might be. I don't know where you could ask cable users though, unless there are some there..

The difference from one ISP compared to another can be tiny, or it can be astounding as the routing can be very different.

Good luck!
 
Quote from notouch:

That pre-news price straddle strategy can work well but there's a big risk of getting slipped by your broker. Is this not an issue with CME futures? I'm working on getting a market order in before the price starts moving. Internet lag would completely screw that strategy up.
More...


No I do not have problems with CME products....works well.
 
Quote from notouch:

That pre-news price straddle strategy can work well but there's a big risk of getting slipped by your broker. Is this not an issue with CME futures? I'm working on getting a market order in before the price starts moving. Internet lag would completely screw that strategy up.
More...


LOL .. this is a laugh .. think about it!

Internet ping =300ms round trip > 150ms one way
Reaction time =15000ms to 45000ms depending

What does 150ms really do?
 
You should also factor in the time your brokers server takes to check your credit standing and approve your order - an issue with orders not placed ahead of time.

This is usually the cause of the WTF type latency.
 
Quote from mokwit:

You should also factor in the time your brokers server takes to check your credit standing and approve your order - an issue with orders not placed ahead of time.

This is usually the cause of the WTF type latency.
More...



This is the part of the loop that I think tradestation has the slowest speed in the world.....LOL! :D
 
From doing a bit more research I think my ping times to the US are fairly good. Ping times between backbones between UK and US are about 60 ms so total ping times of 100 ms are pretty good. Times are of course limited by the speed of light. I do notice that IB has the option of a dedicated line which I'm considering:

"Client pays for a T1 line that connects directly to one of IB's Data Centers, which are located throughout the world. A dedicated lease line connects users directly into the IB system and facilitates a quicker and more secure connection than a regular Internet line."
 
I try to measure my latency to a certain website for trading. Unfortunately my ADSL service provider won't allow me to ping. When I use my dial-up connection, it measures about 380 ms latency. Based on the dial-up latency result, does anyone know what this approx. would be using the ADSL connection?
 
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