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ROI vs low latency infrastructure costs

(Last Updated On: April 4, 2012)

ROI vs low latency infrastructure costs

Any studies, views or information on evaluation of ROI vs latency reduction would be appreciated.

i.e. Spend a million pounds to reduce execution latency by 2 milliseconds with expected returns of ????

 

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All depends on the fail overs and DR procedures you have within your infrastructure already. How fast can your connections roll over upon failure and how long will it take for your system to be back on online and trading. This is the simplest form of working this out. Calculate those times and compare with lost business within your company to find out the RO, and if you can afford to carry on with your current system or need to new investments.

 

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I think you missed the point with all the resilience discussion.
I think the ROI depends on exactly how the latency reduction gains are being leveraged, which is highly variable and subject to a wide range of factors, however I am sure there are a large number of Quants and Statisticians in this group who are standing by to tell us otherwise.

 

NOTE I now post my TRADING ALERTS into my personal FACEBOOK ACCOUNT and TWITTER. Don't worry as I don't post stupid cat videos or what I eat!

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