The Blog of James: Do your market data providers introduce unnecessary latency? (Poll)
This month’s poll is a straight-forward question - Do your market data providers introduce unnecessary latency? Before you answer “of course’ - not so fast! The key word is “unnecessary”.
First, you have to decide who is your market data provider. Do you connect directly to a market? In which case, it’s probably the exchange (or other venue) we are talking about. Do you use a vendor or distributor? Are they providing a direct market access (DMA) solution or is data being collected and distributed from a central point(s)? Perhaps that distributor is your own internal department charged with providing market data to the enterprise. Then you may need to ask “Where do they get the data?”.
Second, you have to decide if the latency introduced is extraneous. Are the functions your provider are performing necessary and thus can be used to rationalize that latency? What if they didn’t do those functions - would you be left to doing them thus adding latency yourself? Speed-of-light and direct connectivity issues aside, is your data going on a magic carpet ride and showing up at your processor at some time beyond what would be ideal? Are there an excessive number of connection points, relays, routers, or other ether hurdles your data must surmount that can be attributed to your market data provider?
Lastly - and perhaps most important - is there a better way? Could your organization obtain and process the data more efficiently, effectively, or in any way faster? If so, why aren’t you doing it? (Perhaps you would care to offer an opinion or insight?)
A lot of questions with a simple answer - yes or no? See the poll in the right-hand margin.
