Micro-Latency refers to extremely short delays in data transmission or processing within a system, typically measured in microseconds or even nanoseconds. In crypto trading, particularly for institutional RFQ and options platforms, minimizing micro-latency is paramount for competitive execution and real-time market response.
Mechanism
Achieving micro-latency requires highly optimized hardware, specialized network infrastructure, and low-level software design, often bypassing traditional operating system layers. This includes proximity hosting to exchange matching engines, kernel bypass networking, and efficient code paths for critical functions like order routing and market data dissemination, all contributing to accelerated system reactions.
Methodology
The strategic pursuit of micro-latency aims to gain a temporal advantage in financial markets, enabling participants to react to market events and execute trades before competitors. This methodology is fundamental to high-frequency trading strategies and efficient price discovery, as it directly impacts order fill rates and the avoidance of adverse price movements in fast-moving crypto markets.
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