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A-Team Insight White Papers

Viewpoints on Latency – I Am Not a Number – May 2011

The “Three Ms of Latency” are a set of essential steps that turn the data that’s derived from a roster of tools – including those from contributors Corvil and TS-Associates – into meaningful, actionable information that can be leveraged to boost one’s business.

The Three Ms of Latency are: Measure, Monitor and Manage.

It all begins with measurement. That could mean measurement of latency within an execution management system, or the latency that exists for market data received from an exchange, or even the roundtrip latency for a completed trade with an alternative trading system or dark pool.

Latency is not a constant. Continuous measurement, with snapshots taken at intervals, is the nature of latency monitoring, and approaching it pro-actively – before a problem arises – is the best way to do it.

In the real world, latency management helps the business takes a view on what latency is required for each application, and it’s up to the IT people to deliver it. Mapping latency data on to applications and business processes is vital, and tools will evolve to traverse the value chain, in order to address and deliver on all of the three Ms.