What is ultra-low latency direct market access?
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This refers to a computer network built to cope with high-frequency trading. With modern trading strategies, speed is of the essence. Direct market access is a means of bypassing broker-dealers and interacting directly with the order book of an exchange.
Where have you heard about ultra-low latency direct market access?
It’s not really something the average investor concerns themselves with, but the race for ultra-low latency is a hot topic of conversation among high-frequency traders and technology vendors. Only speeds of under 1,000 microseconds qualify as 'ultra low'.
What you need to know about ultra-low latency direct market access.
Direct market access systems built specifically for high-frequency trading are capable of handling vast volumes of orders, and experience delays of no greater than 500 microseconds. Typically, order volumes of more than 5,000 a second can be executed in 100 microseconds.
Because of the lack of interaction with a broker, this approach is sometimes referred to as ‘no touch', and often used in combination with high-speed algorithmic trading.
Find out more about ultra-low latency direct market access.
Read our definition of direct market access for more insight into high-frequency trading.
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