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Why is low latency essential for Capital Markets?

29th Aug 2023

Capital Markets businesses gain their competitive edge entirely through winning the trade execution race. If transactions are delayed, or the best price missed, then the business risks losing revenue and profit, as well as confidence in their data and infrastructure.

The world of high-frequency trading comprises complex algorithmic compute analysing a plethora of market conditions and automating trade executions by the mili- and the nano-second. Low latency is not just a feature of the trading environment, it IS the trading environment. Without it high-frequency trading is just not possible, and the risk of slippages and rejected trades becomes extreme.

In fast-paced, dynamic financial markets the transaction volumes are constantly growing. Businesses in this sector need accurate, real-time information delivered securely, reliably and at speed onto their network, with processing and execution completing in less than the blink of an eye.

How to achieve low latency

There are several ways to increase network and processing speed and thus reduce latency.


Situating data processing activity as close as possible to the source of the data is a key way to reduce latency. This means physically locating servers and cloud infrastructure within financial hubs and exchanges.

Infrastructure providers who have established access and presence in the global centres of financial trading offer huge advantages to capital markets participants needing ultra-low latency connectivity for their operation.

Rapid application and network modification and configuration capability

Field-programmable Gate Arrays provide time-sensitive processing solutions to reduce latency. Automating processes and updates from a centralised control point also contributes to increased speed and reduced lag.

Given that a typical trade interval for stock is between 0.2 – 0.9 seconds, ultra-low-latency data automation achieving optimally priced trades in a well-managed, secure and compliant environment is a necessity.

Connectivity technology

Advanced ethernet switches form a vital component of all high-performance networks.

The features which are particularly useful in reducing low latency are switches’ duplex capabilities to make the entire connection bandwith available to multiple transmission packets; and their ability to begin forwarding packets before the complete packet has been received.

In addition switches can be remotely upgraded to ensure high performance.

Connectivity between vendor solutions can be deftly managed by infrastructure providers with a comprehensive approach to reducing delays.

A sophisticated proposition that keeps tabs on the latency, speed and accuracy of the infrastructure, as well as the integrity of the data in circulation is vital in order to maintain reliability and effectiveness.

Analytics as a Service

Low latency sustainability can be ensured through comprehensive monitoring and analysis of the infrastructure to identify bottlenecks, understand capacity issues and verify new system roll-out performance.

This approach also allows financial firms to track and analyse real-time performance of every single price, quote or trade traversing business critical processes, and gives immediate access to  actionable insights.

Beeks’ offering

For an accessible monthly subscription Beeks Analytics offers an intelligent solution to monitor your transactions with the precision timing required in financial markets, link complex transactions together, connect them with market data or other drivers, and link back to network packets.

Beeks Analytics as a Service is an important element of cloud-based infrastructure service provision, helping organisations monitor, track and analyse performance from the bottom-up, and take action when required to reduce latency, resolve network traffic issues and improve profitability.

In addition, scanning the complete data processing horizon from within one platform guarantees a unified view, preventing costly duplications and silo working.

Partnered with Beeks Cloud infrastructure Beeks Analytics provides a level of performance insight that other hyperscale cloud providers would not be able to access.   |

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