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How to reduce latency for your Market Data API?

Latency can be a significant obstacle in any data-heavy environment. In high-frequency trading, even the smallest delays can make a big difference. But it’s not just traders who need to be concerned. Any application that depends on fast data transfer benefits from reduced latency to remain competitive.

Fortunately, there are ways to improve data transfer speed. By making some adjustments and using the right tools, you can bring latency down to a level without hindrance. This guide outlines the methods to optimize your market data API for faster performance.

  1. AWS Direct Connect with a dedicated port The public internet often introduces unwanted delays. Using AWS Direct Connect gives you a direct line to AWS services, bypassing the usual internet routes. This provides lower latency, higher bandwidth, and more consistent performance. Learn more about AWS Direct Connect

  2. AWS VPC Peering, simplifying your network path Routing data over the internet can introduce unnecessary complexity and slowdowns. With VPC Peering, your data stays within the AWS environment, which enhances speed and security. It allows direct communication between different VPCs, eliminating unnecessary detours and ensuring smoother data transfer. Read more about AWS VPC Peering

  3. GeoDNS Routing, shortening the path for faster delivery The distance your data has to travel affects how quickly it reaches its destination. GeoDNS Routing helps reduce this by sending data to the nearest server, ensuring a more efficient route. It functions similarly to a global delivery service but focuses on data instead of physical items, and the result is quicker transmission. Check out AWS Route 53 GeoDNS Routing

  4. WebSocket API, real-time data transmission For real-time data needs, WebSocket API offers an efficient solution. Unlike HTTP, which requires repeated requests, WebSocket maintains a continuous connection, allowing data to be sent as soon as it becomes available. This means updates are received immediately, which is invaluable for time-sensitive applications. See the CoinAPI WebSocket API Documentation

  5. Optimized data fetching and caching Fetching data repeatedly can slow down performance, especially when some of that data is frequently used. By setting up caching, you can reduce the need to fetch the same data multiple times, which improves response times. Implementing an effective caching strategy is a simple but powerful way to reduce latency.

  6. FIX API for high-frequency trading For high-frequency trading environments, the FIX API offers a solution designed to handle data at rapid speeds. It’s specifically built to meet the demands of trading platforms, ensuring data is transmitted quickly and reliably, which is essential when timing is critical. Read the CoinAPI FIX API Documentation.

  7. SLAs and monitoring, staying ahead of latency issue Monitoring performance is key to maintaining low latency. SLAs provide clear expectations regarding performance, while real-time monitoring allows you to spot any slowdowns before they affect users. Set up alerts to stay informed of latency spikes, and you’ll be better positioned to keep things running smoothly.

By integrating AWS Direct Connect with a Dedicated Port, CoinAPI’s cross-connect, AWS VPC Peering, and GeoDNS Routing, you can significantly reduce latency while building a robust solution tailored to your requirements.

It’s important to note that latency depends not only on the provider and exchange but also on the customer’s infrastructure. For instance, achieving latency below 100ms between London and Binance may require additional data centers or optimized configurations. The direct path from London to Binance is approximately 250ms. To achieve sub-100ms latency end-to-end, additional infrastructure and strategic server placement on the customer side are essential. Some matching engines are inherently located more than 100ms away, requiring careful planning to address such challenges.

We collaborate closely with customers, offering insights and tailored solutions to minimize latency while ensuring a flexible and scalable setup. These technical options and optimizations make the Market Data API ideal for high-frequency trading platforms and other latency-sensitive applications.