Cisco Cisco Nexus 5010 Switch White Paper
of 12
W H I T E P A P E R
I n T E R - P A R T y L A T E n c y M A n A g E M E n T
of 12
W H I T E P A P E R
I n T E R - P A R T y L A T E n c y M A n A g E M E n T
1. Who’s Responsible
for Latency?
No single party controls the full end-to-end
path for electronic trading or market data
delivery. Many members of the trading industry
have invested substantially to reduce latency
within their own infrastructure; but ultimately
everyone remains dependent on partners to
path for electronic trading or market data
delivery. Many members of the trading industry
have invested substantially to reduce latency
within their own infrastructure; but ultimately
everyone remains dependent on partners to
ensure adequate end-to-end performance.
Participants today have little visibility into
sources of latency outside their own four walls.
Traders can monitor order-entry round-trip
latency, but finding out where this latency is
incurred is much harder – in your own
infrastructure, across a service provider’s
network, or in the market center itself? The
latency experienced by unidirectional market
data traffic is a particularly frustrating
blind-spot for all parties.
Participants today have little visibility into
sources of latency outside their own four walls.
Traders can monitor order-entry round-trip
latency, but finding out where this latency is
incurred is much harder – in your own
infrastructure, across a service provider’s
network, or in the market center itself? The
latency experienced by unidirectional market
data traffic is a particularly frustrating
blind-spot for all parties.
This situation leads to nervousness, and
sometimes to finger-pointing. In recent polls by
low-latency.com, 55% of respondents felt that
their market data providers should do more to
reduce latency, and 87.5% felt that market
centers and exchanges are not pulling their
weight when it comes to latency. These polls
were informal but are corroborated by our own
conversations with industry participants. Traders
worry that important investment decisions
about where to co-locate and which systems to
upgrade might be misguided, or could be
nullified by a lack of corresponding
commitment from their partners. And they also
worry that inequitable treatment might leave
them at the mercy of other market players.
sometimes to finger-pointing. In recent polls by
low-latency.com, 55% of respondents felt that
their market data providers should do more to
reduce latency, and 87.5% felt that market
centers and exchanges are not pulling their
weight when it comes to latency. These polls
were informal but are corroborated by our own
conversations with industry participants. Traders
worry that important investment decisions
about where to co-locate and which systems to
upgrade might be misguided, or could be
nullified by a lack of corresponding
commitment from their partners. And they also
worry that inequitable treatment might leave
them at the mercy of other market players.
These perceptions follow inexorably from the
current lack of end-to-end transparency.
Without doubt, many industry participants
recognize the importance of latency. Some
companies measure and advertise latency
figures for their own trading platforms. But
these measurements are not standardized or
made in a consistent fashion that allows
current lack of end-to-end transparency.
Without doubt, many industry participants
recognize the importance of latency. Some
companies measure and advertise latency
figures for their own trading platforms. But
these measurements are not standardized or
made in a consistent fashion that allows
Traders worry that important
investment decisions about where
to co-locate and which systems to
upgrade might be misguided
Figure 1
No single party controls the full end-to-end trading
loop. How can partners work together to achieve
superior latency performance?
loop. How can partners work together to achieve
superior latency performance?