Latency, location and connection
|March 24th, 2015, 08:03 PM||#11 (permalink)|
Futures Experience: Advanced
Broker/Data: Advantage Futures
Favorite Futures: Energy
Posts: 1,518 since Dec 2013
Thanks: 1,358 given, 2,268 received
Forum Reputation: Legendary
I believe that is incorrect. I think you will find that the ICE Brent matching engine is at Equinix/Cermak in Chicago.
While this may seem illogical you need to think back to ICE's root's. They originally launched as an OTC Metals & Oil trading system but only became successful several month later when they also launched OTC US Power & Gas. When they bought the International Petroleum Exchange ("IPE" home of the Brent & Gasoil futures contracts) several years later, the IPE didnt have any electronic trading system, so I believe electronic trading of Brent was implemented on their current inferstructure in the US which also gave it the advantage of proximity to Globex. With their acquisition of LIFFE in London this could obviously change but I suspect that the proximity to Globex will keep it in Chicago. Saying that there is a rumor that they ("ICE") may be moving everything to New Jersey where the NYSE matching Engine's are. This is probably the scenario that makes them the most money.
Maybe @artemiso can confirm their location and comment on the NJ rumors. He seems to be the most knowledgeable on things like that here.
What type of trading are you doing?
If it's point and click colocation probably won't help you much. The prices/info still have to cross the atlantic for you to react/click on them.
If it's any form of automated strategy/autospreader etc then colo will probably make a huge difference, depending upon how latency dependent you are. (Autospreader - High, High/Med Frequencey Scalping - High, Low Frequency Scalping - Med, Automated EOD trading strategy - Low).
DMA is exactly that. It's direct market access. If your talking or checking with another system, going through another server it's not DMA. DMA is normally pretty expensive because you have to pay the exchange for a private data feed. In my experience this is upwards of $1000/month/exchange. As @sam028 said "CQG may have direct access but not you and your "retail" AMP/CQG account."
For what it's worth I looked at CQG several years ago, but passed. At the time everything went through their infrastructure. Hence even if you were colocated you were still waiting for messages/prices to go through their infrastructure before it got to you. I don't know if that's still the case - something I read recently implied it wasn't but I'm not a user so am not sure.
+1 all of this.
I would add that it's quite possible to get all three of these at the same place. Not familiar with CQG but I know with TT Risk and Credit functions are performed at the TT Gateway which is connected to the exchange feed. If the broker wants to change/check risk, they log onto the Gateway. Nothing has to be sent to them first.
Note that a common trick to reduce the latency of the credit and risk check is to send an off market order, and then change the order to the price you want when you need it. The initial order is credit/risk checked but the price change isnt. You probably need to be pretty advanced though to be taking advantage of that - I know I'm not.