Latency and Broadband

grantx

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There's increasing emphasis on low(er) latency regarding live feeds and order transmissions. I believe a fixed line, for example, is better than an internet connection to exploit low latency.

Two questions: Is there a significant difference between fixed line and broadband/internet?

If so, would upgrading broadband improve speed?

Grant.
 
1. Yes but only as long as your fixed line is at the same or greater speed as the broadband connection. Having said that the same packetization protocols are likely to be used in both cases unless you're a specialist so its only a problem if you have internet congestion.

2. If you are at 1500/256 then 20000/512k won't make much difference. The major change will be serialization (how long it takes to stream the packet into the switch before it crosses the backbone with the same delay as the slower entry speed (its like having a very fast onramp to a motorway when most of the delays are not at the onramp and your ramp was already fast)). It may even slow things down if the higher speed broadband creates errors although I suspect that the higher speed will just get slowed down to the same ramp entry speed as the original broadband.

3. Unless you have a machine responding to the market by issuing responses from your computer at machine speed its unlikely to make a noticeable difference whatever you do. Humans have a response time thats probably greater than your current internet delay. What's your ping time to the broker?
 
Nine,

I understood the last paragraph. If I upgraded my broadband connection, presumably any delay caused by backlog/congestion will be reduced or cleared sooner?

Grant.
 
Nine,

I understood the last paragraph. If I upgraded my broadband connection, presumably any delay caused by backlog/congestion will be reduced or cleared sooner?

Grant.

Possibly, but the improvement you may get might not be significant in terms of other delays such as broker processing time (eg check margin, route order to exchange), exchange processing time (order matching etc).

If your broker is in the US and you are in the UK, your traffic still has to cross the Atlantic whether by leased line or whatever. There will be transmission delays.

If you want to play this game, you need to have your box located physically close to the exchange with a direct link to the exchange.
 
Dccraig,

I suspect that is an expensive option. My interest is purely Eurex (Frankfurt) so while I still wouldn't have a box close to there, being half the distance at least compared to the Atlantic is slightly better?

Grant.
 
No. The delays by backlog/congestion will be the same ... unless ...

If your service provider:
1. has different grades of service
2. has some means of supporting them in the network
3. applies all of the above to the higher speed link and not the lower.

The problem is that most adsl2 links and adsl links terminate at the same router in the exchange. And all the delay is after that router.

The biggest gains might come from a "business orientated" service provider. Here in Aus I have used kid orientated, telco and business orientated. If they do it right then the more expensive one (loading the backbone and international connections up less) will be best. If.

Download Ping Plotter freeware and ping the route to your broker then post it here.
 

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No. The delays by backlog/congestion will be the same ... unless ...

If your service provider:
1. has different grades of service
2. has some means of supporting them in the network
3. applies all of the above to the higher speed link and not the lower.

The problem is that most adsl2 links and adsl links terminate at the same router in the exchange. And all the delay is after that router.

The biggest gains might come from a "business orientated" service provider. Here in Aus I have used kid orientated, telco and business orientated. If they do it right then the more expensive one (loading the backbone and international connections up less) will be best. If.

Download Ping Plotter freeware and ping the route to your broker then post it here.

Call me cynical, but I'm fairly skeptical of some of these business offerings. Optus for example price their "business" phone and ADSL bundle at exactly the same price as their "home" bundle. Kind of says it all.

As you say, some business offerings may be superior, but I think you need to see some real evidence of that before paying a premium.
 
I think you could ask their techs to ping various international sites from both service offerings and send you the traceroutes.

But. I do know that the too cheap oversubscribed offerings should be avoided like the plague.
 
I haven't done the ping test yet but I have done a speed test. These are the results (I'm using either 4mb or 8mb broadband):

Download at 1952Kbps
Upload: 185Kbps.

I could upgrade to 24mb but would this significantly increase the reception of real-time prices/data?

Grant.
 
I haven't done the ping test yet but I have done a speed test. These are the results (I'm using either 4mb or 8mb broadband):

Download at 1952Kbps
Upload: 185Kbps.

I could upgrade to 24mb but would this significantly increase the reception of real-time prices/data?

Grant.

Almost certainly the answer is no. A couple of Mb/sec is probably more than sufficient for just about any data feed.

For an example of brokers bandwidth to the exchange, have a look at this page from IB:

Direct Access Broadband Connectivity

T1 = 1.65Mb/sec (mostly North America)
E1 = 2 Mb/Sec (mostly rest of the world)

I forget what T3/E3 is, but it is higher.

Note the fractional bit (only a portion of a T1/E1 - I think time division mux'ed onto the link).

If you upgrade to 24Mb, you may in reality get nowhere near that speed. It is highly dependent on your distance to the telephone exchange and you'll probably need to be within about 1Km to get that. I have nominally 20Mb/sec but only get about 5Mb as I am about 4 Km form the exchange.
 
I haven't done the ping test yet but I have done a speed test. These are the results (I'm using either 4mb or 8mb broadband):

Download at 1952Kbps
Upload: 185Kbps.

I could upgrade to 24mb but would this significantly increase the reception of real-time prices/data?

Grant.

Probably not - transfer speeds (what you posted) measure maximum sustained transfer speed (think width of pipe). Latency (ping time) is how long it takes to transfer a single packet, and so this determines the delay between you sending the order, and the order hitting the exchange.

As an example, if you had a 1Mbps connection with a ping of 200ms, and I had a 1Mbps connection with a ping of 100ms, we'd get similar download speeds, but if we both click market buy at the same time, my order hits first.
 
Gentleman,

Thank you for the replies. The problem then is one of latency. So what are the options for maximising this?

Grant.
 
Gentleman,

Thank you for the replies. The problem then is one of latency. So what are the options for maximising this?

Grant.

First you need to figure out whether it is a major problem, and to what extent it can be dealt with. Download this:

PingPlotter Freeware

And use it to ping your broker's server - get a decent sample size and then post a screenshot. Basically, this will send some data to your broker, tell you what path it takes, and how long each step takes.
 
Please refer to attachment.

Grant.
 

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Not sure about the "destination unreachable" bit, but things look ok at your end - not sure you could get substantially quicker without moving closer to the exchange, and at the moment your orders are probably arriving in lessthan human reaction time (200ms I think). Unless you're using at automated system, you probably wouldn't notice much difference.

What timeframe do you trade?
 
52,

Actually, that's quite reassuring - means I don't become pre-occupied with something immaterial.

I'm currently trading (scalping) on a simulator from 25-100 tick charts. Thus far, the results are brilliant but my current feed leaves a lot to be desired (especially the order entry)so a switch to CQG may be the only way to go. It is expensive but at the equivalent of 2 ticks a day, I reckon it's worth it in terms of reliability, stability, news and overall superiority to the retail product.

Thank you for help, mate (and everyone else), it's really appreciated.

Grant.
 
There's increasing emphasis on low(er) latency regarding live feeds and order transmissions. I believe a fixed line, for example, is better than an internet connection to exploit low latency.

Two questions: Is there a significant difference between fixed line and broadband/internet?

If so, would upgrading broadband improve speed?

Possibly. Firstly, have you tried other data feeds, would be my immediate thought? ADSL should give you latency around 50-100ms. There's not a hell of a lot you can trim off that, and less that you'll notice.

Secondly, DO NOT use WiFi if you care about latency. It's around 20 times slower than cabled, doing tests at work, and home gear is likely to be much slower than that. Also, you'll get packet loss, which depending on whether your feed uses TCP or UDP, may well result in some horrific latency as TCP slows itself down until it doesn't see packet loss.

ISP will make a difference; while they all go into one multiplexer at the exchange, they do get fished back out again somewhere deep in the bowls of hell/BT. I use names.co.uk, who are fantastic, but best in the UK is meant to be Zen if you absolutely must have every last bit of edge.

Router is also worth thinking about; I use Netgear. Linksys are meant to be good, Cisco make professional level products (they do a suitable router at around £250, and you'll probably want a pro to set it up, but it will be rock solid once set up). Once had a D-Link router; it was a nightmare to set up, but incredibly fast (but you WILL need a networking pro to set it up; someone who understands how to deal with the internal DNS cache not cleaning out properly and how to disable it and reconfigure the DHCP server to provide the correct settings).

If latency is a major issue, you could also look at co-location, where you host a computer with say Telehouse (which could be considered the main Internet hub for the UK), and it does all your processing and only has to send the results over your relatively slow connection.
 
Rnicoll,

That's impressive. Although not 100% clear, I don't think it will take much working out. Thank you,mate.

Grant.
 
You can get a direct leased line to your UK based broker. 10 ms on average.

Over the internet you are talking about 40-60 ms on average for UK brokers.

In both cases it will take the same time to reach the exchange servers from the broker gateway.

Even as speedy your connection is there will always be algo orders before you, and resting orders before both u and algo.

Then hey 1 sec is 1000 ms, maybe we should focus on training our brain to think quicker.

Good luck guys

Baldur
 
You can get a direct leased line to your UK based broker. 10 ms on average.

Over the internet you are talking about 40-60 ms on average for UK brokers.

In both cases it will take the same time to reach the exchange servers from the broker gateway.

Even as speedy your connection is there will always be algo orders before you, and resting orders before both u and algo.

I think the ping times shown in Genesis Securities, LLC. cover this fairly well; 0.2-0.9ms. That makes getting the data out of the network card, through your OS, into the program and back again a noticable concern for time. That's also what the seriously fast people are working with.

Then hey 1 sec is 1000 ms, maybe we should focus on training our brain to think quicker.

Amazon.co.uk: Dr Kawashima's Brain Training: How Old Is Your Brain? (Nintendo DS): PC & Video Games all round :)
 
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