How Close Can You Get to Trading at the Speed of Light?
Can you trade at the speed of light?
Let’s review some facts:
It takes about 5.4 microseconds for light to travel one mile in a vacuum. Optical fiber acts as a “light pipe” to transmit light between the two ends of the fiber. So basically once your order gets on a fiber line, it could be traveling around the magnitude of light speed. But the time it takes to get your order to a fiber line could travel much slower.
Let’s follow some steps.
1. You have to place your order on a platform.
2. The order has to travel out of your computer.
3. The order has to go via the internet or a direct line.
4. The order has to go through many routers or switches.
5. The order has to get through your broker's risk system.
6. Then it has to travel to an exchange or other market center.
By the time all of this is done, it will take between 250 microseconds (for a collocated server on a 10 gig fiber line) to 30-200 milliseconds (for an end user over the internet). This is still fast but not at light speed.
You can easily see how fast your broker is by performing a ping test against their website or servers. Open your command prompt and Type PING and your broker’s domain name. If they are blocking pings, you should be asking yourself why they wouldn’t want you to know how fast they really are.
Our collocated servers and fiber connections provide state-of-the art connectivity to minimize latency.
SpeedTrader is a division of Stock USA Execution Services, Inc Member FINRA, NFA and SIPC.
