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I am based in London. For point and click trading on the CME is there a latency advantage to using a VPN to connect to a machine located at my broker's office in Chicago compared to just using a business-quality internet connection from my office. Typical software platforms would be used (TT, CQG).
Edit (I am not allowed to post reply)
I am inquiring about VPN not VPS. Yes, I did a search, but nothing dealt specifically with latency and VPN. I am trying to understand why brokers would be pushing a VPN to a local machine as a solution for long-distance clients. I did not think that VPN could defy the laws of physics. However, perhaps the data transfer for a screen refresh is substantially less than the full data transfer.
Edit 2:
Thanks for the replies. Sorry, I am confusing people by getting terminology mixed up. What the broker would offer is a secure (via VPN I surmise) RDP (either to a remote desktop PC or Server). As mentioned below "local PC will receive the remote PC monitor display" so there should be less data transfer. Also mentioned below, the "broker's office network has fast, dedicated access to the order routing infrastructure that you use, then it is possible that you can get a latency advantage over connecting directly to the order routing infrastructure over public internet". Is it always on a case by case basis whether the RDP solution has better latency for point-and-click trading? If I were to get a demo of the RDP solution, is it straightforward to test the latency/ping times?
Can you help answer these questions from other members on NexusFi?
A VPN will add some delay, as the network packets are (usually) encrypted which requires some compute time. To reach the VPN end point over Internet you'll go through the same bunch of routers, and you won't be able to enhance the speed of light and the law of physics .
VPN's are good for the security but won't help for latency.
I forgot, about: "However, perhaps the data transfer for a screen refresh is substantially less than the full data transfer." this doesn't make sense for a VPN.
For a VPS connected in RDP it makes (a bit) more sense, as your local PC will receive the remote PC monitor display, and not the "full data transfer".
The only advantages of a VPN to your broker's office are:
1. Secure communication, e.g. protected access to your trade reports, lower risk of your trade messages etc. being sniffed by malicious third parties in the intermediary. Often, people get protected access to their trade reports by setting up a secure SFTP on either side and brokers can accommodate push/pull.
2. If your broker's office network has fast, dedicated access to the order routing infrastructure that you use, then it is possible that you can get a latency advantage over connecting directly to the order routing infrastructure over public internet.
The disadvantage is that VPN access will add latency, as @sam028 has correctly pointed out. Software-based VPN access will probably add <1 ms of traffic encryption and protocol latency. It's not discernible to the naked eye, honestly.
As a result of the offsetting effects of the 2nd advantage vs the disadvantage, it's hard for us to tell you what to do. You have to benchmark the latency yourself. To be honest, I've never heard of VPN access directly to the broker's office. Are you sure you heard them correctly? Sounds like a huge security risk to take for a client. If they have unsecured devices within their office, a black hat hacker can compromise their infrastructure through your VPN access.
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