What is latency in stock market?
Latency in stock markets is the delay that occurs between placing an order and executing it on the exchange. It affects the speed and accuracy of trade execution and can impact the profitability of traders.
For instance, Mr. A wants to buy 100 shares of ABC Ltd. at ₹100 per share. He places a market order at 10:00:00 am, but due to high latency, his order reaches the exchange at 10:00:02 am. In those two seconds, the price of ABC has risen to ₹100.05 per share. The trader ends up paying ₹5 more than he intended for his order.
What is latency in trading?
Latency in trading is the delay that occurs between placing an order and executing it on the exchange. It affects the speed and accuracy of trade execution and can impact the profitability of traders. For instance, Mr. A wants to buy 100 shares of ...
Why is latency important in trading?
Latency is significant in trading as it determines how quickly traders can react to market movements and capture opportunities. Low latency enables faster trade execution and better price discovery, while high latency can result in slippage, missed ...
What is Post-Market and can I place an order during Post-Market?
Post-Market is the period where the trading activities take place just after the closing of the regular stock market session. Post-market sessions are scheduled between 3:40 PM and 4:00 PM on the trading days for both the National Stock Exchange ...
What are stock indices and how are they calculated?
To gauge the movement of all the stocks at any given time is a cumbersome process for an average investor. Hence, representation has been designed which encompasses a basket of similar stocks, to indicate the trend of the market. This representation ...
What is the effect of a market order?
Market orders usually get executed immediately at the best prevailing prices in the market. The investor will not know the exact price at which the order will get executed while placing the order. For instance, let’s assume that the LTP of ABC stock ...