Yes, great explanation. Isn't 256kbps upstream (DSL) a big enough "hose" for trading using TT's Xtrader? (assuming latency is ok) Sending an order doesn't take much of a hose, does it?
Does anyone know about IP tunneling? I overheard or read something along those lines. I imagine it means specifying a route to your final destination and somehow protecting the integrity of that route. How about vpn? I'm automating a system that will benefit from a low latency connection. Short of a direct line or a box at the clearing firm I'm not sure what the best solution will be... Low latency equates to being first in line for the fill. I can't imagine how this would not be important. Even when you know your limit price seconds in advance and have a resting order (at the exchange) it is still first come first serve. Every little bit counts.
Hi mercurial, Without going into the details about tunneling and virtual private networking, these have mainly to do with security and encrypting. You still make use of roughly the same links as other Internet connections. The basic mechanisms of hops, repeaters and so on would apply, thus also latency intervenes. Of course if you are willing to pay the price, more direct hookups like direct lines will minimize the variable number of intermediary repeaters each introducing variable amounts of delay. So you will probably get less latency and more stablity of the latency over time. You are probably correct to assume that higher priced connections will often combine superior lines with superior networking protocols. You get what you pay for. nononsense
I think you are right chisel. Assuming latency is OK, I would almost dear to say that 28kbps would do as well as 256kbps talking about "Sending an order". Maybe I get some flak on this from people who know better. I have been going for years now on high speed connections!
I have to fully concur on this, I was just about to write exactly the same thing. However, I can testify this first-hand, since I used to trade off a 28K connection for a good 2 years, so plenty of reference base. 1500K, 56K, 28K, 14K, it doesn't matter. Your orders should be maybe a few hundred bytes at best, you could probably place them real-time from an old mobile phone without bandwidth problems. That said though, again it's not the bandwidth, but the speed (ping) you get the order in with. That's all that matters. I have a T-DSL (1.5mbps) now, but that hasn't increased my order speed. It has only increased the number of tapes, depths and charts I can have open. When you look at your orders being water, it's a few drops through the hose at best, even with the narrowest connection. However, that said, once your bandwidth is fully exhausted, latency can change, too, because you now need to queue the information packets you're trying to send/receive, which then means serial instead of parallel processing, and can mean a considerable time delay (like queing in German departments). Hope that clarifies things well enough.
Ah, If you can shave the NY hop, that would be good but probably would not gain you alot - never know though unless you analyse the latency at the hops. For MCI, it is possible to do anything (if they still own UUNET - I forget,) but they may not do it for you coming from the west coast. nitro
would be about 7ms faster - the cross country trip is the whole delay. take out that and im down in the 25-35ms range. tried from a different datacenter - a real tier 1 with dual oc48 (4 GB of bandwidth) still getting hit at the cross country trip. it does not matter for my trading style - yet