LDA Technologies, provider of ultra-low latency, networking and FPGA technology, has launched a new multicast distribution system designed to address longstanding fairness issues in market data delivery for electronic trading. The system synchronises exchange customer ports to within 50 picoseconds, an improvement of 98% over conventional Layer 1 switches, enabling exchanges to distribute data uniformly across participants.
Exchanges have historically struggled to deliver market data evenly due to infrastructure-induced latency, often seeing three to five nanoseconds of jitter between switch ports and additional delays from cabling. LDA’s solution eliminates the need for compensatory measures such as cable length adjustments by managing synchronisation directly at network endpoints, effectively levelling data access times across clients.
“This system enables exceptionally low jitter,” explains Vahan Sardaryan, LDA’s co-founder and CEO, in conversation with TradingTech Insight. “Exchanges already take significant steps to equalise latency for clients, for example by using identical cable lengths for all participants. Some, like Deutsche Börse, are particularly rigorous in enforcing this. However, infrastructure still introduces discrepancies: Layer 3 switches can add tens of nanoseconds, sometimes even up to a microsecond of jitter, and even Layer 1 switches typically contribute four to five nanoseconds. In today’s environment, where trading systems operate at extreme speeds, those are substantial delays. Our system addresses all of these issues. It can compensate for cable length differences and ensures that no client experiences more than 50 picoseconds of jitter between ports.”
The system also supports multicast filtering, allowing exchanges to deliver only the relevant data streams to clients. This function, typically handled by higher-latency Layer 3 switches, is now performed without introducing microsecond-scale delays, helping to further reduce overall system latency.
With the launch of this product, LDA aims to help exchanges uphold market integrity and fairness, while also enabling them to meet and exceed regulatory expectations for data distribution.
“We’re currently conducting proofs of concept with a number of exchanges, and we’re actively engaging with others as interest grows,” states Sardaryan.” Increasingly, exchanges are exploring this solution either due to regulatory pressures around fair and equal access, or because their customers are raising concerns and pushing for improvements.”
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