Before we discuss low latency execution in more detail, it's important to understand the term latency. In its most basic form, latency is the delay between a user passing an instruction and that instruction reaching its destination before being executed. In the world of cutting-edge investment and trading, every millisecond helps.


Is it possible to put a value on latency?


When it comes to low latency execution, you may think it is difficult to put a value on this process. Well, a study by the Tabb Group found that for major trading firms, a 1-millisecond advantage could be worth up to $100 million a year. If this is the case, it's no surprise that companies literally invest millions of dollars to secure low latency execution services.


Time-sensitive nature


If we look at the bigger picture regarding latency, the ability to execute and process tasks with minimal delay is critical for time-sensitive actions. This can include real-time communications, gaming, and industrial control systems, as well as financial trading. Many of the processes used to create focused instant trading systems have been transferred to other industries to increase speed and accuracy.


Critical aspects of low latency execution


There are several factors to consider when it comes to latency, which include:-


Speed of execution


Akin to a jigsaw, when looking to maximise speed in a low-latency execution environment, there are many pieces to put together. This involves optimising hardware, cutting-edge software, and network configurations, which ensure rapid processing. In today's fast-moving market, with algorithmic trading occurring in less than a millisecond, as you can see above, any delays could be expensive.


Determinism of systems


As latency is very important across the board, many systems today provide maximum latency figures. In effect, this is a worst-case scenario regarding the passing of transactions in the investment world and other real-time actions. Today’s systems tend to be fairly predictable, consistently meeting timing requirements, with volatility their worst enemy.


Real-time processing


Many trading systems available today involve real-time operating systems or processing techniques to ensure all instructions are delivered and transacted within a stringent timeframe. FinTech has pushed the envelope on cutting-edge technology and assists those looking for low latency execution services.


Other issues to discuss


While these tend to be the main factors influencing latency times, there are also other topics to consider, such as:-


· Optimisation techniques - the use of cutting-edge algorithms to optimise speed.

· High-performance hardware - the use of CPUs, GPUs and specialised hardware.

· Network optimisation - high-speed connections ensure minimal delays.

· Low latency storage - storage solutions offering quick read/write speeds.


The greater the optimisation of each of these elements, the less the delay, and the more valuable the system becomes to the end client.




In technical terms, low latency execution is an interdisciplinary field involving computer science, network engineering, and hardware design. The goal is to minimise delays and ensure prompt response times in critical applications. In other words, low latency execution services are perfect for market traders.

Back to News