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The knowledge platform for the financial technology industry

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Dell Processor Acceleration Technology Industry Briefing

In the world of the financial markets, securing an edge over the competition can mean life or death for a trading firm. Whether it is acting on news alerts or price movements, determining the best trading opportunity, or delivering an order to the marketplace, microseconds mean the difference between winning or just playing.

Reducing those microseconds – referred to as latency – is a continuing focus of trading firms, and an increasing challenge as that latency is pushed down to double and single digit microseconds. The “race to zero” becomes increasingly difficult and expensive to engage in as it nears its conclusion.

To date, much of the focus on latency reduction has been directed at reducing the physical distance between trading firms and the markets in which they participate, which results in so-called propagation latency. Nowadays, co-location of trading firms’ servers in the same data centers as markets’ matching engines has nearly eradicated that distance and associated latency.

With local network latency essentially addressed, an emerging but still challenging area of focus for latency reduction is on trading execution and matching system applications, and on the servers that host them.

This industry briefing outlines the low-latency trading landscape, details the latency characteristics of key data and trade execution processing applications, and introduces microprocessor techniques, such as Dell Processor Acceleration Technology, designed to reduce latency in a cost-effective manner.