Internet connection speed

Discussion in 'Order Execution' started by yxy, Feb 15, 2007.

  1. yxy


    In the past couple of days, I experienced that the my order did not get filled right away (I use cybertrader.).

    This might be a common thing for volatile stock, but I want to make sure that I've done my part for fast execution.

    I am currently using a regular DSL, and thinking about up-grading to so-called "elite DSL."

    Does this make difference in execution?

    Also, I was recommended that I get the newest modem that they have, if my modem is over 2 years old. I got my modem in 2004, so yes, it's over two years old.

    Any thoughts and inputs are appreciated !
  2. In simple terms ... No.

    Unless you are doing some machine based scalping your own reaction times will be the key issue and vary from 250ms (best possible case) to 750ms (most likely) in a simple test like catching a falling ruler. If thinking about your rules is involved it will be longer.

    Serialisation delay is the main thing changed by your input speed. If its currently asymmetrical and maybe the up speed is only 128kbps then a 1024 byte packet (big) is going to take

    1024*10/128,000 = 80ms.
    256k upload = 40ms gain 40
    1024k upload = 20ms gain 20
    2048k upload = 10ms gain 10

    As you can see the gains disappear into the noise of reaction time of 250-750ms.

    I tend to use stoplimits placed on IB's server ... in this case both my reaction time and the serialization delay are 0 so that's the best case (on a machine local to the exchange).

    Nitro uses his own machines but has enormously fast low delay (not internet) connections to his brokers servers.
  3. moron28


    I just got AT&T Elite DSL as a backup to my cable modem and it didn't work out too well for me. This level of service has the modem syncing with the telco's DSLAM at a higher frequency and is therefore more susceptible to noise. If you are located too far from the DSLAM or Remote Terminal, the line attenuation might be too high for you to get an acceptible signal to noise margin for Elite service. In that case the service won't be available to you. However, if you are located in a borderline area the phone company will still sell you the service and it will suck big time. You will get lots of CRC errors and you will probably experience fast but jerky service. This is not what you want.

    What you really want is low latency to your broker. If you are nowhere close to maxing out your current bandwidth think twice before going to Elite, as it will not give you lower latency. Your lower speed DSL service is always more stable for any given location, and the further away you are from the telco the more noticeable the difference.
  4. notouch


    IB should send your stop limits to the exchange which means only your place in the queue stands in the way of execution.
  5. yxy


    Thanks for all the info.

    I had problems getting in a trade, not getting out the trade, both times...

    Sounds like it's not the connection, but rather I just have to brush up skills to get in, and also to accept that sometimes orders just don't get filled right away when a stock is moving really fast.

    Both times, the stock was moving really fast, but they are lots of both sellers and buyers in a tape, so that's why I was wondering why mine did not get filled for a long second. I do understand if there are only buyers out there and no sellers, then my buy order won't get filled right away...

    moron 28 (interesting nickname):

    I live in SF, and AT&T sells Elite DSL here, but I'm not sure how close I am to the terminal and how close I have to be to the terminal. But you're suggesting that my regular DSL would be more stable than Elite. Yeah, I don't want a fast, but freaky connection...
  6. You can call your broker and ask about the timestamps when the order was received by them and when it was sent to the exchange.

    When I daytraded using Schwab a couple years ago, when you were over your overnight buying power limit (but of course were still under your daytrading buying power limit), orders were susceptible to being manually approved. This could take anywhere from a few seconds to a minute and a half.