e-Forex-Nov-23

TRADERS WORKSHOP
Achieving and maintaining an ultra-low latency FX trading infrastructure
“When your business grows your infrastructure will need to
be able to accommodate increasing trading volumes”
Gordon McArthur
“Most true low latency is built inhouse
as firms like to retain the IP,
but finding employees with the right
skill set to be able to do this can be
difficult as there are not many low
latency engineers in the market,” he
says. “Alternatively, hiring consultants
can be very expensive. In general, the
project would be costly, so budget will
be a large deciding factor.”
In-house development demands a
team with specialised knowledge in
network and system architecture and if
a firm lacks this expertise, it may lean
towards outsourcing suggests Culiniac.
“Building and maintaining an ultralow
latency infrastructure can be
expensive, so firms need to consider
whether the potential return on
investment justifies the upfront
and ongoing expenses,” he says.
“Outsourcing can be faster compared
to building in-house - a critical factor
in markets where timing is crucial
– and companies may choose to
outsource if ultra-low latency trading
platforms is not their core business,
allowing them to focus on their
primary market activities.”
McArthur reckons the average timeto-money
for an in-house build ranges
from 18 months to three years if the
firm can guarantee the right resources
and location. “On top of that there
is the CapEx for the infrastructure
and also the cost of hosting and
connectivity,” he adds. “People might
question the security of outsourcing
infrastructure rather than keeping it
in-house, but the right infrastructure
and provider will provide a solution
that addresses these concerns.”
He suggests firms question each
provider’s scalability and security
offering, the measures they have in
place to reduce downtime (as well
as how compliant they are with
NETWORK ANALYTICS TOOLS USE
AI TO CATCH NETWORK HICCUPS
IN REAL TIME AND SUGGEST FIXES
industry regulations), their proximity to
financial hubs in order to ensure real
time data access, and the scalability of
their solution.
“When your business grows your
infrastructure will need to be able
to accommodate increasing trading
volumes,” adds McArthur.
ASK THE DIFFICULT QUESTIONS
When considering specialists for
trading network and infrastructure,
experience with ultra-low latency
is vital according to Silahian, who
cautions that although there are
a plethora of providers, not all
understand the intricacies of ultra-low
latency operations.
“Customisation is another factor
and specifically whether they can
tailor solutions to fit your trading
operations,” he says. “The support
they offer post-setup - and how they
price their service without skimping on
quality - are other considerations, as
are scalability, the ability to stay on the
right side of regulators, and security.”
Markman agrees that ultra-low latency
expertise is vital and that working with
a partner that has successfully built
and integrated similar systems will
reduce risk.
When deciding to partner with
a specialist trading network and
infrastructure provider, Culiniac also
believes it is crucial to prioritise firms
with a proven track record in achieving
ultra-low latency since achieving
such performance levels demands
substantial R&D and time investment.
“Additionally, the chosen provider
should offer a comprehensive solution
that optimises infrastructure, network,
and software,” he concludes. “They
should support a deep functional
scope and have the capability
to maintain and extend solution
capabilities while maintaining ultralow
latency.”
74 NOVEMBER 2023 e-FOREX