Tick-to-Quote Latency refers to the time delay between the receipt of new market data (a “tick” representing a trade or order book update) and the generation or adjustment of a corresponding quote by a market-making or trading system. In high-frequency crypto trading, especially within RFQ platforms and institutional options trading, minimizing this latency is paramount for maintaining competitive advantage, ensuring accurate pricing, and managing execution risk in rapidly moving digital asset markets.
Mechanism
The mechanism involves a sequence of high-speed computational processes: ingesting raw market data feeds (ticks), processing this data to update internal models and fair value calculations, and then transmitting a new or updated bid/ask quote to the exchange or RFQ venue. Any delay at any stage—network transmission, data parsing, algorithmic calculation, or order routing—contributes to the overall latency. For crypto market makers, a lower tick-to-quote latency allows them to react faster to market changes, providing tighter spreads and avoiding adverse selection when quoting for institutional clients.
Methodology
Achieving ultra-low tick-to-quote latency requires a rigorous systems architecture and engineering methodology focused on hardware optimization, network proximity to exchanges, and highly optimized software
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