Low latency
Encyclopedia
Low latency allows human-unnoticeable delays
between an input
being processed and the corresponding output
providing real time characteristics. This can be especially important for internet connections utilizing services such as online gaming
and VOIP.
VOIP is tolerant to some degree of latency since a minor delay between input from conversation participants is generally attributable to non-technical issues, but substantial delays may impair communication. On the other hand, online games are more sensitive to latency since fast response times to new events occurring during a game session are rewarded while slow response times may carry penalties (for instance in a first person shooter a slow response time may leave a player in the line of fire for longer periods of time). A player with a high latency internet connection may show slow responses in spite of superior tactics or the appropriate reaction time due to a delay in transmission of game events between said player and other participants in the game session. This gives players with low latency connections a technical advantage and biases game outcomes, so game servers favor players with lower latency connections, sometimes referred to as low "ping" times (typically measured in ms).
Minimizing latency is currently of interest in the capital markets
, particularly where trading based on algorithms (Algorithmic Trading
) is used to process market updates and turn around orders within milliseconds. Low latency trading refers to the network connections used by financial institutions to connect to stock exchanges and Electronic communication networks (ECNs) to execute financial transactions. Joel Hasbrouck and Gideon Saar (2011) measure latency based on three components: the time it takes for 1)information to reach the trader, 2) the trader’s algorithms to analyze the information, and 3) the generated action to reach the exchange and get implemented. Hasbrouck and Saar contrast this with the way in which latencies are measured by many trading venues who use much more narrow definitions, such as, the processing delay measured from the entry of the order (at the vendor’s computer) to the transmission of an acknowledgement (from the vendor’s computer). With the spread of computerized trading, electronic trading now makes up 60% to 70% of the daily volume on the NYSE and algorithmic trading close to 35%. Trading using computers has developed to the point where millisecond improvements in network speeds offer a competitive advantage for financial institutions.
Low latency is also being discussed in the advertising community, as a form of advertising that responds rapidly to consumer inputs, often from tweets.
Access time
Access time is the time delay or latency between a request to an electronic system, and the access being completed or the requested data returned....
between an input
Input/output
In computing, input/output, or I/O, refers to the communication between an information processing system , and the outside world, possibly a human, or another information processing system. Inputs are the signals or data received by the system, and outputs are the signals or data sent from it...
being processed and the corresponding output
Output
Output is the term denoting either an exit or changes which exit a system and which activate/modify a process. It is an abstract concept, used in the modeling, system design and system exploitation.-In control theory:...
providing real time characteristics. This can be especially important for internet connections utilizing services such as online gaming
Online game
An online game is a game played over some form of computer network. This almost always means the Internet or equivalent technology, but games have always used whatever technology was current: modems before the Internet, and hard wired terminals before modems...
and VOIP.
VOIP is tolerant to some degree of latency since a minor delay between input from conversation participants is generally attributable to non-technical issues, but substantial delays may impair communication. On the other hand, online games are more sensitive to latency since fast response times to new events occurring during a game session are rewarded while slow response times may carry penalties (for instance in a first person shooter a slow response time may leave a player in the line of fire for longer periods of time). A player with a high latency internet connection may show slow responses in spite of superior tactics or the appropriate reaction time due to a delay in transmission of game events between said player and other participants in the game session. This gives players with low latency connections a technical advantage and biases game outcomes, so game servers favor players with lower latency connections, sometimes referred to as low "ping" times (typically measured in ms).
Minimizing latency is currently of interest in the capital markets
Low latency (capital markets)
Low latency is a topic within capital markets, where the proliferation of algorithmic trading requires firms to react to market events faster than the competition to increase profitability of trades. For example, when executing arbitrage strategies the opportunity to “arb” the market may only...
, particularly where trading based on algorithms (Algorithmic Trading
Algorithmic trading
In electronic financial markets, algorithmic trading or automated trading, also known as algo trading, black-box trading or robo trading, is the use of electronic platforms for entering trading orders with an algorithm deciding on aspects of the order such as the timing, price, or quantity of the...
) is used to process market updates and turn around orders within milliseconds. Low latency trading refers to the network connections used by financial institutions to connect to stock exchanges and Electronic communication networks (ECNs) to execute financial transactions. Joel Hasbrouck and Gideon Saar (2011) measure latency based on three components: the time it takes for 1)information to reach the trader, 2) the trader’s algorithms to analyze the information, and 3) the generated action to reach the exchange and get implemented. Hasbrouck and Saar contrast this with the way in which latencies are measured by many trading venues who use much more narrow definitions, such as, the processing delay measured from the entry of the order (at the vendor’s computer) to the transmission of an acknowledgement (from the vendor’s computer). With the spread of computerized trading, electronic trading now makes up 60% to 70% of the daily volume on the NYSE and algorithmic trading close to 35%. Trading using computers has developed to the point where millisecond improvements in network speeds offer a competitive advantage for financial institutions.
Low latency is also being discussed in the advertising community, as a form of advertising that responds rapidly to consumer inputs, often from tweets.
See also
- Latency (engineering)Latency (engineering)Latency is a measure of time delay experienced in a system, the precise definition of which depends on the system and the time being measured. Latencies may have different meaning in different contexts.-Packet-switched networks:...
- Low latency (capital markets)Low latency (capital markets)Low latency is a topic within capital markets, where the proliferation of algorithmic trading requires firms to react to market events faster than the competition to increase profitability of trades. For example, when executing arbitrage strategies the opportunity to “arb” the market may only...
- Low Latency Trading
- RAM latency