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Latency, location and connection


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Latency, location and connection

  #1 (permalink)
 Jking556 
London England
 
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Hi all

So to start im based in the UK. I'm using AMP futures which is American. I use a CQG connection and am looking to trade oil.
It is my belief that the ICE Europe brent exchange is based in London?
I ask this because my internet connection takes 30ms to hit a server in London. Whereas it takes 125ms to hit one in America. This to me suggests I would be better off trading Brent in the UK rather than WTI on the Nymex?
Cqg is direct market access, it's my belief that my order goes straight to the exchange and wouldn't have to be routed to AMP in America and then sent on the exchange, is that correct?

Any help would be much appreciated!

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  #3 (permalink)
 
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 sam028 
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AFAIK it's ICE Europe and London for the Brent.
From what I know you will have some network latency for orders, as the risk management is made in USA for CQG (but there are some pricing/orders servers in London).
CQG may have direct access but not you and your "retail" AMP/CQG account.

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  #4 (permalink)
 Jking556 
London England
 
Experience: Beginner
Platform: Sierra chart
Trading: Oil
Posts: 15 since Jul 2014
Thanks Given: 9
Thanks Received: 2


sam028 View Post
AFAIK it's ICE Europe and London for the Brent.
From what I know you will have some network latency for orders, as the risk management is made in USA for CQG (but there are some pricing/orders servers in London).
CQG may have direct access but not you and your "retail" AMP/CQG account.

Thanks for the reply. I understand. For any sort of benefit to be gained from my location I will have to use a UK broker. I suppose I might aswell just trade WTI crude on the AMP account if my signal has got to be sent to the US anyway.

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 sam028 
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Jking556 View Post
Thanks for the reply. I understand. For any sort of benefit to be gained from my location I will have to use a UK broker. I suppose I might aswell just trade WTI crude on the AMP account if my signal has got to be sent to the US anyway.

Not really, that's not that simple .
The broker can be from whatever country, but every network communication has too be UK based if you want to have the lower possible latency.
There are basically 3 main things to check:
- price feed: where the price coming from, which exchange(s) and where are the "relay" (CQG London for you I presume)
- risk management server: before sending an order to the exchange it has to be "valided" (do you have enough margin, are you allowed to trade this instrument, and so on). From what I know this is done in USA for CGQ, at least for now.
- order feed: to which location is your order sent (CQG London) after it's validated

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  #6 (permalink)
 Koepisch 
@ Germany
 
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sam028 View Post
Not really, that's not that simple .
The broker can be from whatever country, but every network communication has too be UK based if you want to have the lower possible latency.
There are basically 3 main things to check:
- price feed: where the price coming from, which exchange(s) and where are the "relay" (CQG London for you I presume)
- risk management server: before sending an order to the exchange it has to be "valided" (do you have enough margin, are you allowed to trade this instrument, and so on). From what I know this is done in USA for CGQ, at least for now.
- order feed: to which location is your order sent (CQG London) after it's validated

If you look at the CQG infrastructure then it seems that everything is maintained within their servers. The brokers can lease the risk management services from CQG.

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  #7 (permalink)
 
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 sam028 
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Koepisch View Post
If you look at the CQG infrastructure then it seems that everything is maintained within their servers. The brokers can lease the risk management services from CQG.

Yes, but not all brokers are using this "option". According to usual CQG prices for their professional services I presume it's quite expensive and not a good choice for every broker.

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  #8 (permalink)
 Koepisch 
@ Germany
 
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Today NinjaTrader confirmed my Statement - really good News !

"When connecting to the London gateway and trading on Eurex, your orders will be validated for risk in London and routed to Frankfurt. Only a copy of the message will be sent to Chicago to allow the risk desk in Chicago to see the results of the order."

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  #9 (permalink)
 Jking556 
London England
 
Experience: Beginner
Platform: Sierra chart
Trading: Oil
Posts: 15 since Jul 2014
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Koepisch View Post
Today NinjaTrader confirmed my Statement - really good News !

"When connecting to the London gateway and trading on Eurex, your orders will be validated for risk in London and routed to Frankfurt. Only a copy of the message will be sent to Chicago to allow the risk desk in Chicago to see the results of the order."

Ah brilliant! Thanks for confirming that. There's the answer then, some milliseconds can be saved by trading markets closer to your location.

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  #10 (permalink)
 
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 sam028 
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Koepisch View Post
Today NinjaTrader confirmed my Statement - really good News !

"When connecting to the London gateway and trading on Eurex, your orders will be validated for risk in London and routed to Frankfurt. Only a copy of the message will be sent to Chicago to allow the risk desk in Chicago to see the results of the order."

Hmm, this is not what I understood.
@Koepisch, I'll contact you by PM or email to see if you can try something to validate this.

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