About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

Cost of Trading Infrastructure Goes Down as Demand for Lower Latency Goes Up

Subscribe to our newsletter

The cost of technology to optimise trading infrastructure is going down, but that doesn’t mean demand for increasingly low-latency solutions is going down too. A panel at A-Team Group’s recent TradingTech Summit in New York City discussed the issues of optimisation for high performance under the auspices of moderator Greg Piesco, associate partner at Citihub Consulting.

Opening on the cost of technology, and how consumers are responding, the panel went on to discuss the issue that whenever lower latency is mentioned, there is always an impetus to build a new network, but how much will it cost?

As trading organisations continue to call for lower latency solutions and the name White Rabbit – a time-deterministic, low-latency Ethernet-based network which enables transparent, sub-nanosecond accuracy timing distribution – pops up repeatedly, low latency technology providers are under pressure to create more competitive technologies at lower costs.

Jason England, head of capital markets networks and hosting at TD Securities, said: “Technology for performance is getting much cheaper, we don’t buy anything less than a ten-gig circuit for anything now. Within the metro area it’s about one thousand dollars a month.”

Raymond Russell, co-founder and chief technology officer at Corvil, added: “Technology is constantly getting cheaper, but there’s still a competitive pressure to make sure you’re keeping up with your competitors, so there’s a certain steady state on the price you have to pay, but there’s no let up on the pressure on that. We see our customers operating in a way that’s ever more cost conscious, and one of the moves that we see is that people are consolidating and sharing infrastructure both internally and externally – it’s cheaper, but it’s still not cheap technology. We’re trying to sweat the most out of technology to meet the needs of business, but also to provide an economic price point.”

Cost-conscious firms are scrutinising where they spend as the cost of being a major player in the trading game has increased significantly overall in terms of infrastructure. In order to manage costs, Eric Powers, head of infrastructure at HC Technologies, proposed a model for charging underlying teams. He said: “In a smaller organisation, we’re very conscious about individual trading strategies being aligned directly with all the infrastructure they’re using. We look at the costs in alignment with trading teams to see, for example, if team one is more successful and profitable than team two.”

The discussion moved on to the granularity of timestamping based on three key areas: time, implementation and how protocols function. Steve Williams, general manager at Fixnetix, warned that if clock drift occurs, analysis can be off the mark, and if core systems are implemented incorrectly, data could be inaccurate. He said that if timestamping is not implemented properly in an overarching style that allows firms to connect to all the elements in their world and sync them, there will be clock drift. England added: “With MiFID II and the CAT, I would say that our cost to measure and be compliant, and process alerts and understand how things are drifting, is more expensive than the underlying system.”

Subscribe to our newsletter

Related content

WEBINAR

Upcoming Webinar: Unlocking value: Harnessing modern data platforms for data integration, advanced investment analytics, visualisation and reporting

4 September 2025 10:00am ET | 3:00pm London | 4:00pm CET Duration: 50 Minutes Modern data platforms are bringing efficiencies, scalability and powerful new capabilities to institutions and their data pipelines. They are enabling the use of new automation and analytical technologies that are also helping firms to derive more value from their data and...

BLOG

Johannesburg Stock Exchange Launches JSE-FIX Order Routing Service

The Johannesburg Stock Exchange (JSE) has launched JSE-FIX, a new order routing service developed in collaboration with electronic trading solutions provider Rapid Addition. The service is designed to lower order transmission costs while offering a scalable, vendor-neutral solution for market participants. JSE-FIX leverages Rapid Addition’s technology to facilitate efficient sell-side broker connectivity for both domestic...

EVENT

AI in Capital Markets Summit New York

The AI in Capital Markets Summit will explore current and emerging trends in AI, the potential of Generative AI and LLMs and how AI can be applied for efficiencies and business value across a number of use cases, in the front and back office of financial institutions. The agenda will explore the risks and challenges of adopting AI and the foundational technologies and data management capabilities that underpin successful deployment.

GUIDE

Trading Regulations Handbook 2022

Welcome to the third edition of A-Team Group’s Trading Regulations Handbook, a publication designed to help you gain a full understanding of regulations that have an impact on your trading operations, data and technology. The handbook provides details of each regulation and its requirements, as well as ‘at-a-glance’ summaries, regulatory timelines and compliance deadlines, and...