Why is latency important in trading?
Latency plays a crucial role in trading because it determines how quickly your orders are executed in a fast-moving market. The lower the latency, the quicker your order reaches the exchange—giving you a better chance to trade at your intended price before the market moves.
Why latency matters?
- Faster order execution: Lower latency means your orders hit the market sooner.
- Reduced slippage: You’re more likely to get the price you expected.
- Competitive edge: In high-frequency environments, milliseconds can determine who gets the trade.
- Higher returns: Efficient execution supports better trade outcomes over time.
Example:
Both traders want to buy 1000 shares of ABC Ltd. at ₹100 per share.
- Mr. Ronnie’s trading terminal has 300 ms latency.
- Mr. Mani’s platform has 50 ms latency.
Mr. Mani’s order reaches the exchange 6 times faster, increasing his chance of executing the trade at ₹100. If the price rises during the delay, Mr. Ronnie could pay more or miss the opportunity.
What if...
Scenario | What you should know |
---|
You are an arbitrage trader | Low latency is essential to exploit price differences before they vanish. |
You are a scalper | Latency must be minimal—your strategy relies on split-second entries and exits. |
You use algorithmic strategies | Latency needs vary—some strategies require real-time execution, while others don’t depend heavily on speed. |
Traders on FYERS benefit from sub-50 ms latency, which supports both discretionary and algo trading needs. For latency-sensitive strategies, always use a wired broadband connection and avoid mobile data.
Last updated: 19 Jun 2025
Related Articles
What is latency in trading?
Latency in trading refers to the delay between when a trader places an order and when that order is actually executed on the exchange. Even small delays—measured in milliseconds—can significantly affect the outcome of trades, especially during ...
What does latency mean in trading?
In trading, latency refers to the time delay between the moment a trader places an order and when that order is executed on the exchange. This delay can be due to various factors including internet speeds, processing times, and system performance. ...
How does FYERS ensure low latency for its customers?
At FYERS, we are committed to providing a seamless and responsive trading experience. Minimising latency is central to that goal. We use advanced infrastructure, optimised systems, and real-time performance enhancements to ensure fast, reliable order ...
What is the latency in FYERS for order placements?
At FYERS, order placement latency is optimised to be under 50 milliseconds, providing a fast and reliable trading experience across both retail and algorithmic trading environments. This ensures that your orders reach the exchange quickly, reducing ...
How does futures trading work?
Futures trading allows investors to take positions on the future price movement of an asset without paying the full contract value upfront. Instead, you pay a margin—typically a small percentage of the contract’s value—which gives you leveraged ...