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Trading Metrics Offers Point-to-Point Latency Testing
February 5, 2008
New York-based Trading Metrics said Monday that it has released an application that allows firms to get a comprehensive, “point-to-point” understanding of their trading operation’s data latency.
Trading Metrics says that its new Market Latency Metrics (MLM) is designed to continuously measure market data latency, the throughput of trading systems and whether there are delays or bottlenecks related to exchange-derived data. Though there are an abundance of available latency-reducing products, there are relatively few testing options.
Traders “rely on market data being fresh; the older and more stale that market data, the more money they lose,” said Jeff Drew, founder and CEO of four-year-old Trading Metrics. Drew called it imperative that high-frequency traders accurately track their latency and throughput in real time and from the point of origin to the destination.
“While it may be beyond your control to always have fresh data,” he added, it is possible to keep “a close watch on the freshness of the data you may be receiving from a particular source.” Such an assessment allows firms to make informed decisions about data sources and delivery modes.
What is innovative about Market Latency Metrics, claims Trading Metrics, is its ability to monitor latency from various points of the trading network. Sang Lee, co-founder and managing partner at Boston-based research firm Aite Group, described the approach as an effort to provide “a holistic view” of latency and an alternative to homegrown latency monitoring and testing services that are in operation at some sell-side firms and large hedge funds.
The new offering continuously measures latency as data travels through direct exchange feeds, consolidated feeds and distribution infrastructure, according to Trading Metrics. The application can identify delays in middleware, network travel times, time through processing servers, load and throughput correlations, and component as well as end-to-end latency.
Company spokesperson Marie Giangrande cites the product’s use of new high-speed network packet capture cards that allow for more granular analysis of message data such as symbols or exchange timestamps. “We don’t work at the packet level but at the business level, opening up the payload of the message and viewing unique data,” she said.
“Most of the other monitoring systems out there are not looking at that level of depth,” added Drew. “They will tell you about the health of the network or the CPU loads on a given market data computer.” He emphasized that MLM tracks data passively, without changing the stream, and that neither market data platforms or trading applications need to be modified to use the system.
Aite’s Lee cautioned that MLM has yet to be tested with live clients. “They have a pilot client now, so it will be interesting to see how the product performs overall,” he said. Hedge funds are likely customers for the new service, he noted.
Privately held Trading Metrics received $4 million in funding from Vantage Point Venture Partners in May. Its technology partners include Reuters, Endace, a New Zealand-based provider of network monitoring technology, and EZX of Springfield, N.J., a trading infrastructure vendor.
London- and Singapore-based Trading Systems Associates last month announced that a major German bank and a large U.S. financial institution had signed on for its TipOff middleware analysis and latency monitoring appliance. In May it said the product had 25 clients. Trading Systems CTO Steve Rogers said that field-programmable gate array (FPGA)-accelerated capture cards, data processing cards that use application-specific integrated circuits, and high-performance 64-bit multicore processors enable TipOff “to capture, decode and analyze all messaging traffic across multiple middleware stacks concurrently and at rates which are in excess of our customers’ most demanding requirements.”
