VPS vs. Dedicated servers?

T

tradeski

Hi,

I'm currently just researching getting into automated trading on a personal basis. I intend to swing trade equities on NYSE, and make under 5 trades a day.

I'd like to have a hosted server of some type, primarily so I have better system and network uptime. I'm not into HFT, so I don't need crazy fast latency. However, as I'm going to go the hosted route I'd like to get decent latency (under 10ms would be great). I've used Amazon EC2 before for other (non-trading) purposes, but from what I have read on this forum I can do better.

My first question is should I go virtual server or dedicated? I see pros and cons to each. Dedicated servers mean full control over the system and more predictable performance. If I went this route, I'd rent a system rather than provide my own as I don't want the hassle of hardware maintenance. On the other hand, a virtual server, if hosted across multiple physical servers, offers better redundancy (as I understand it). That is, if one physical server fails, my instance keeps on running. Since uptime is arguably more important than latency in my case, this may be the better option, especially as it is less expensive. What are your thoughts on this?

My second question is what combination of host/co-lo/provider (I don't want to get into a debate about definitions here - I just mean whoever is hosting my trading platform) and broker would be recommended? I'm likely going to be using NinjaTrader as the trading platform.

Thanks for the advice.
 
We ran some numbers and from a business perspective it made more sense to build out our own system and have it colo'd in tribeca. Which currently doubles as our research and trading machine.

Off the top of my head we paid about $2,500 for our machine (1u, dual Xeon E5-2620, 128 GB ECC ram, 4 TB) and about $100 per month for a dedicated line through steadfast networks. We get under 2ms latency w/ our broker. We do keep copies of essential code/data locally, as well as an EC2 instance in case our datacenter fails, as well as our broker on speed dial (ha). The only real hiccup we had was hurricane Sandy thus far.

That being said, our base of operations is out of NYC so maintenance is as simple as a cab ride downtown.

Realistically, if you're not using the machine to do research, you don't need anything particularly powerful or high in memory.

With that type of volume you're probably best off going with IB.
 
Although hot-failover (no downtime) migrations are possible if VPS hardware fails, that's not a common feature for most providers. More likely they'll restart your instance on new hardware and you'll have some amount of downtime (minutes, but your apps will need to restart). If failover is offered, it will require shared storage which can be a failure point itself -- though that is usually internally redundant.

If you can find a provider that guarantees that a pair of VPSes are on different physical hosts, that could be a cost-effective solution. Having been burned in the past, just make sure you get any promises in writing.

For optimal uptime, you really want independent hardware, at least a pair of dedicated servers, preferably with redundant network connections. Cost adds up, obviously, so it's common to have a "main" trading server and a secondary with low specs, just enough to unwind or hedge positions.
 
Quote from slickpick:

We ran some numbers and from a business perspective it made more sense to build out our own system and have it colo'd in tribeca. Which currently doubles as our research and trading machine.

Off the top of my head we paid about $2,500 for our machine (1u, dual Xeon E5-2620, 128 GB ECC ram, 4 TB) and about $100 per month for a dedicated line through steadfast networks. We get under 2ms latency w/ our broker. We do keep copies of essential code/data locally, as well as an EC2 instance in case our datacenter fails, as well as our broker on speed dial (ha). The only real hiccup we had was hurricane Sandy thus far.

That being said, our base of operations is out of NYC so maintenance is as simple as a cab ride downtown.

Realistically, if you're not using the machine to do research, you don't need anything particularly powerful or high in memory.

With that type of volume you're probably best off going with IB.
More...

Thanks for the reply, slickpick. I'm based in Colorado, so having a solution that doesn't ever require me to go to the data center is important. Using EC2 as a failover is an interesting idea though, and could relieve my fear over a hardware failure on a single dedicated server.

IB does seem to be a popular broker on this forum. I've read that their data center is on CT though. They obviously must have a fast link to NJ, so that's not necessarily an issue for them. However, would I be better off using a data center closer to theirs? Does anyone have any advice about the best place to host a trading system if using IB?
 
Quote from martygale:

Although hot-failover (no downtime) migrations are possible if VPS hardware fails, that's not a common feature for most providers. More likely they'll restart your instance on new hardware and you'll have some amount of downtime (minutes, but your apps will need to restart). If failover is offered, it will require shared storage which can be a failure point itself -- though that is usually internally redundant.

If you can find a provider that guarantees that a pair of VPSes are on different physical hosts, that could be a cost-effective solution. Having been burned in the past, just make sure you get any promises in writing.

For optimal uptime, you really want independent hardware, at least a pair of dedicated servers, preferably with redundant network connections. Cost adds up, obviously, so it's common to have a "main" trading server and a secondary with low specs, just enough to unwind or hedge positions.
More...

Good advice. As I investigate the VPS options I'll be sure to ask about hot-fail-over, and whether independent hardware is used. Thanks.
 
IB have a gateway in Equinix NY4. Most exchanges, including cboe, are in this data center so cost is high. www.fcm360.com can offer a server in this datacenter for about $1k+$750 for cross connect, a month. If cost is an issue contact www.speedytradingservers.com about $170-$210 a month for dedicated, $80 a month for vps but they are in another New Jersey data centre 2ms from IB. Alternatively you can get a 2u rack in IB connecticut for $2k a month, raise a ticket at Ib and you will get the email address of the correct department at IB to contact.
 
you stated your requirements as

- uptime matters to you
- latency is not as important
- swing trading is your method
- using NT7 as platform

so given those 'requirements", Just21 has given you the best choice for you...

unless you want to deal with managing the server, then do waste your time with dedicated (unless you do managed) ... since latency is not an issue... just get enough memory for NT7 (at least 4GB) at least 2 threads, and then at least 50-100GB for the OS/Drive...

Personally, I co-locate (meaning I own my own server and I am responsible for it)... but that can be time consuming if you are not into technology... so simplify things for yourself... a VPS will cover your requirements... and there are lots of vendors out there...
 
You don't need a dedicated server if you are going to trade with IB. Just rent any vps in NY. E.g. DigitalOcean for $10/month is good enough and pings IB trading and market data servers in 1ms.
 
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