Performance targets in financial trading networks are more stringent than in any other type of network deployed today. Message latency and data loss result in missed trading opportunities and have a direct impact on revenue. The standard of performance needed for success is determined by competition from other trading organizations, and this has led to an ‘arms race’ in which latency targets have steadily shrunk from tens of milliseconds to milliseconds, and even to microseconds. CorvilNet is a network monitoring and analysis system by Corvil, designed to provide visibility into network performance at the timescales which matter for financial trading. Traditional network monitoring tools which make measurements over periods of seconds and longer, fail to identify conditions which can add hundreds of milliseconds of latency. CorvilNet addresses this deficiency with a set of new

The latency that messages experience in practice can be strongly affected by system interactions and usage patterns

Learn WP – Measurement & Characterization of Latency in Trading Networks

Traditional monitoring tools miss up to 95 percent of the dynamic congestion events that happen within a few microseconds. These micro-bursts can cause congestion and, when undetected, can create havoc in a market data distribution system. The Cisco Latency Management Solution provides visibility into the quality of service for the delivery of market data and trades.

Key benefits include:

• Reduce operational risk: Early detection of microbursts can help you reduce the time it takes to troubleshoot and fix application performance-related issues and avoid trading outages.
• Regulatory compliance: Latency statistics help prove best execution, which is one of the main regulatory requirements in the United States and Europe

No single party controls the full end-to-end path for electronic trading or market data delivery. Many members of the trading industry have invested substantially to reduce latency within their own infrastructure; but ultimately everyone remains dependent on partners to ensure adequate end-to-end performance. Participants today have little visibility into sources of latency outside their own four walls. Traders can monitor order-entry round-trip latency, but finding out where this latency is incurred is much harder – in your own infrastructure, across a service provider’s network, or in the market center itself? The latency experienced by unidirectional market data traffic is a particularly frustrating blind-spot for all parties.

This situation leads to nervousness, and sometimes to finger-pointing. In recent polls by low-latency.com, 55% of respondents felt that their market data providers should do more to reduce latency, and 87.5% felt that market centers and exchanges are not pulling their weight when it comes to latency. These polls were informal but are corroborated by our own conversations with industry participants. Traders worry that important investment decisions about where to co-locate and which systems to upgrade might be misguided, or could be nullified by a lack of corresponding commitment from their partners. And they also worry that inequitable treatment might leave them at the mercy of other market players.  To Request the Paper