Latency

Latency – The delay between when market data is generated and when it is received by the trading system. Low latency means data (and orders) are transmitted with minimal delay, which is essential for time-sensitive strategies. Latency in trading is measured as “the difference between the time at which the [data transmission] process starts and the time at which [it] finishes”. High latency can cause a robot to act on stale prices, leading to missed opportunities or slippage. Automated traders seek low-latency connections (e.g. colocated servers) so that their robots see nearly real-time quotes.

⬅ Robots Glossary