3 ms·
Are you sure about that? They would on average perhaps be a slight bit faster, but if the randomized delays are an order of magnitude larger than the latency, t
by gspr 6y ago
Are you sure about that? They would on average perhaps be a slight bit faster, but if the randomized delays are an order of magnitude larger than the latency, they may not be able to do anything useful with that advantage.
- bryanrasmussen 6y agowouldn't it be like this? If the delays are randomized then you have as good as chance of getting them as your competitors. On delayed times you will have a bad chance of winning, but in comparison to others with the same delays your latency beats theirs, on non-delayed times your latency beats non-delayed competitors and really beats delayed competitors. Thus in the end the best latency should win biggest on non-delayed trades, and on delayed trades lose least.
- gspr 6y agoUnless that uncertainty now means that your time and resources is best spent elsewhere than shaving ms off your latency.
- zodiac 6y agoWell, think through some toy examples. Suppose there is a market without order matching (again, toy example) and one market participant enters an extremely mispriced order, so the first person to fill that order wins. Even in the presence of random delays, the participant with the lowest-latency connection has a higher chance of filling the order than anyone else. (There are other anomalies, e.g. participants are now incentivized to have as large a number of distinct connections and hence "chances to roll low" on the randomized delay as possible).