CandleFocus Glossary Editor
High-Speed Data Feeds are an essential tool for high-frequency trading (HFT). It is a data connection that provides rapid and real-time streams of data and executions for algorithmic traders. By setting up these ultra low-latency data connections, powerful HFT firms are able to gain a competitive edge by being able to act on real-time data before other investors and traders. These data feed services offer up to the second information on financial market trends and conditions, allowing powerful investors to act on them quickly.
Since the main determinant of latency is the physical distance between data sources, co-location of servers is an important part. Setting up servers within the data centre of an exchange, or at least as close to that source as possible, will reduce the time gap between data delivery and ultimate execution. Such physical proximity is expensive, but worth it for the faster reaction times it provides.
Data feed providers play a key role in HFT setups. These providers link the data centre hosting the algorithmic trading platform to the exchanges' data feeds. This is possible through direct market access connections, which allow HFTs to bypass traditional broker trading processes and access the exchange directly.
Raw data feeds are usually delivered over fiber-optic cables as this provides us of the fastest networks available. In order to ensure utmost accuracy and precision, data streams should be collect from as large a set of exchanges as possible. Technological advancements and improved bandwidth have increased the number of market centers that can feed data in real time.
HFT firms use high-speed data feeds to get an edge over the competition when it comes to the latest market news and conditions. By taking advantage of ultra low latency networks and data feeds, HFTs are able to make decisions and trade faster than their peers. As a result, they can capitalize on market opportunities faster and more efficiently, leading to bigger profits.
Since the main determinant of latency is the physical distance between data sources, co-location of servers is an important part. Setting up servers within the data centre of an exchange, or at least as close to that source as possible, will reduce the time gap between data delivery and ultimate execution. Such physical proximity is expensive, but worth it for the faster reaction times it provides.
Data feed providers play a key role in HFT setups. These providers link the data centre hosting the algorithmic trading platform to the exchanges' data feeds. This is possible through direct market access connections, which allow HFTs to bypass traditional broker trading processes and access the exchange directly.
Raw data feeds are usually delivered over fiber-optic cables as this provides us of the fastest networks available. In order to ensure utmost accuracy and precision, data streams should be collect from as large a set of exchanges as possible. Technological advancements and improved bandwidth have increased the number of market centers that can feed data in real time.
HFT firms use high-speed data feeds to get an edge over the competition when it comes to the latest market news and conditions. By taking advantage of ultra low latency networks and data feeds, HFTs are able to make decisions and trade faster than their peers. As a result, they can capitalize on market opportunities faster and more efficiently, leading to bigger profits.