Velocimetrics Reduces Tick-to-Trade Latency by 90% to 10μs

The ultra-low latency resulted from a partnership with Napatech with the participation of a European investment bank that tested the new solution using the Napatech SmartNIC.

velocimetricsVelocimetrics, a leader in business flow tracking and real-time has partnered with computing platform provider Napatech in order to reduce its tick-to-trade latency. Following a period of collaboration with a global Tier 1 investment bank in Europe, the project has successfully reduced latency to a tenth of previous levels.

The significant competitive advantage for the bank has led the institution to refuse to go public with the announcement, according to Velocimetrics. Tick-to-trade latency was reduced from 100μs (microseconds) to 10μs using the Napatech SmartNIC FPGA-based solution, highly-accurate timestamping along with high-volume data capture and deep buffering.

Paul Spencer, Chief Executive Officer of Velocimetrics

Paul Spencer, Chief Executive Officer of Velocimetrics, commented:

“In trading, every bit of latency makes a huge difference to the bottom line, and slashing it by a factor of 10 is enormously significant and, of course, profitable for the client. Napatech and Velocimetrics have a long and successful partnership, and the joint solution uses an innovative combination of technology; the success experienced by the client with this deployment provides further evidence of the financial value provided.”

Jarrod Siket, CMO of Napatech, said:

Jarrod Siket, CMO of Napatech

“To meet today’s business requirements and address increasing competition and changes in the equities trading marketplace, financial services companies need full, independent visibility of their network and systems, as well as internal and external network applications, to make the right business decisions. This requires advanced monitoring and analytics that can deliver results in near-real time to keep pace with the speed of equities trading. The solution provided by a combination of Napatech and Velocimetrics technology met all customer requirements and did so in a scalable and cost-effective way.”

The tight competition between financial institutions in the capital markets has continually increased the need of keeping latency to an absolute minimum, with sub-100 microsecond latency for tick-to-trade being a standard for fast trading environments.

The investment bank that participated in the project with Velocimetrics and Napatech realized ultra-low latency, from 100μs to 10μs, which resulted in faster alerting, quicker drill-down and root cause analysis, leading to less system downtime and the ability to alter trading strategies fast. The bank also improved network visibility and insight, operational cost savings, and real-time feedback into the bank’s trading systems.

In 2018, Velocimetrics appointed John Benini and Steve O’Brien to help expand its footprint among investment banks, international hedge funds, and exchanges in the United States and Canada.