I have been looking into the idea of leasing a server at a data center, that has a good solid data center, good backbone as far as the networking end of things, reliable service, and high reliability as far as uptime.
The goal would be to find a company that can offer me a leased server, which I can install my trading software on and run my automated strategies on, I currently clear trades through IB, I used to clear also through PFG, but as everyone knows that is no more...
I have reached out to IB and they offer a dedicated circuit into their data center, obviousley there is a cost to this, so I was considering the other option of a leased server.
Any body out there that is willing to share who they went with, and the pros, and cons of this, costs, and also the latency to their brokers execution platform, and also your data feed, IE Zenfire/Kinetick/other, etc. etc.
Just trying to get an idea if this is an option for me to consider looking more into.
I found a few places on the internet already, and getting information from them, once I get the info back I will share it with everyone.
Sounds to me that you need a VPS service rather than a true server colocation service. It would cost upwards of $5000 to rent a rack in Equinix Aurora/Frankfurt for sub-millisecond fills, but that is overkill for most people.
I believe (they keep this slightly secret) that IB's servers are in Greenwich, Connecticut, which means you'll want to find a VPS service that is located on the east coast. To prove this hypothesis, my Chicago server averages 1.9ms round trip pings to CQG's Chicago server, but takes 22ms to IB's "secretly-located" server. Before you try anything else, go set up a free Amazon EC2 account, build a virtual server image in its U.S. East (Virginia) data center and see if you get satisfactory latencies between the VPS and IB's trading server (gw1.ibllc.com). If you're located in PA already, though, you wouldn't gain appreciable advantage through EC2 besides the advantage of getting near 100% uptime for practically free.
The biggest weakness with a VPS setup is that many trading platforms are not optimized for multiple cores - especially NinjaTrader - which means that you will not benefit from choosing a high performance plan past a certain number of cores. (I've actually benchmarked this: NT takes exactly the same time to complete the same optimization sequence on a 1 core x 1.6 GHz, 2 GB RAM machine as it does a 32 core x 1.6 GHz, 32 GB RAM machine.) However, most VPS providers do just that - you pay more for extra cores, not extra clocks on each core. In short, if your strategy is going to require a lot of computation, you will probably have to use your own server hardware.
If you have the time and expertise to build a VHD image, figure out Microsoft's VM role lingo and write C# code, and have a copy of Windows 2008 Server R2, Windows Azure has a Chicago data center that should average in the 1.0~1.9ms range to any Chicago-based brokerage. 90 day free trial. You can probably find a workaround to be perpetually on free "trial".
The biggest advantage has been uptime. The second notable advantage (few people emphasize this but I've found it to be more impressive than connection speed) has to deal with mitigating basic issues of the human element with a dedicated trading machine - it has become much easier to restore a backup, manage a strategy among several users, avoid accidental shutdown or someone stupid pressing F5 for his MacBook backlighting while NT is running. Speed on the other hand, not so much; I've found some of my strategies to be bottlenecked by CPU performance, not connection speed.
Lastly, here are some round-trip pings from my servers to a sample collection of brokerages' servers.
Interactive Brokers (US trading server)
Chicago, IL 22.373
London, UK 87.455
Tokyo, Japan 203.030
Interactive Brokers (European trading server)
Chicago, IL 111.353
London, UK 27.274
Tokyo, Japan 272.005
Chicago, IL 1.972
London, UK 90.869
Tokyo, Japan 177.638
CQG (New York)
Chicago, IL 21.258
London, UK 73.540
Tokyo, Japan 200.914
Chicago, IL 94.427
London, UK 4.771
Tokyo, Japan 269.064
Chicago, IL 1.831
London, UK 93.346
Tokyo, Japan 171.887
The following 3 users say Thank You to artemiso for this post:
No, noone ever did that, which is why there are no companies offering this. Ups, thre are. Come on, the titel is not smart.
Anyhow, for tradin there are like three layers.
* Aurora - REALLY expensive. VERY fast, but unless you need it it just COSTS. We talk 4 digit for a server and you have to own the server anyway. Remote hands 500 USD per hour (iks).
* Second tier financial, which I was offered by some brokers. 400 USD per month, cheaper remote hands, no server lease.
* TONS of companies (fdcservers, swiftway - I use the later) that rent you servers in Chicago. In my cae i pay around 180 USD per month, have a 16gb ram quad core with a 120gb ssd and a 1tb hard disc and 10.000gb traffic. I have 1ms to my broker. Good enough for me. Not the cheapest opton, but I like to run my own virtualization platform to have 2-3 trading machines (real, simulated, technical testing).
Latest there are virtual servers, but those have disadvantages but thy can be a lot cheaper.
THe rest is you having to know what you want and need
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@artemiso, can you share your CQG pingable IP ?
I have quite similar results with IB US, 18ms from Chicago, 2ms from NY (New-Jersey).
Of course latency matters, but the standard deviation of this latency matters too, it has to be as low as possible.
@c12345: very honestly, I won't recommend any cloud based solution, Azure, EC2, RackSpace, ..., for this kind of activity (trading automated or discretionary). The perfomances can be excellent during one day (hour), bad the other one, and you don't really know why. Cloud based solutions may be good for backtesting (but it might be cheaper to buy a 2 years old i7 based PC), but it's really not a good idea for real-time stuff. I'm using cloud solution to store big documents, and some solutions works great when you want to deal with cheap and secure very large file-systems (RackSpace/Swift), but for real-time stuff, forget it!
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The following 3 users say Thank You to sam028 for this post:
I agree I would never use a cloud solution for my trading strats. I would not even use it to host a website. IMO cloud is really only good for storage type applications. They cram to much onto these cloud platforms and it is easy for someone else to doing something stupid to bring you down. A VPS or dedicated server close to exchange is the way to go and you can get sub ms. I would only use a VPS through someone like @sam028 via speedytradingservers.com who is limiting number of accounts on each server or a dedicated machine through a reputable data center.
"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
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CQG New York
A bunch of quantitative traders have been using cloud servers to good success. (See: Quantitative Trading: Trading platform and EC2 revisited) My personal experience has been that cloud servers are substantially faster and more stable than any home PC. I don't know how they compare to a trader-tailored solution. I've traded successfully on a continuous cloud server instance for 3 months with zero downtime. Deciding between a cloud computing server and any other colocation server will come down to a cost-benefit analysis of the monthly rate and any additional advantages of a trader-tailored service.
Sure, I think the point is that using big clouds like Amazon, vs using custom solution like dedicated server or VPS created specifically for trading, there is a huge difference. You want to go with the private solution if you care about latency, not the big cloud.
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