​Network lag warning! Improvement of network stability in real-time trading of US stocks??? Solution

Network lag warning! Improvement of network stability in real-time trading of US stocks??? Solution//Global IPLC service provider of Shigeng Communication

一、In US stock trading, such scenes are happening every day. In a rapidly fluctuating market environment, network latency exceeding 3 milliseconds may lead to missed trading opportunities. Especially when market volatility intensifies, the processing volume of trading instructions surges, and network transmission delays become more pronounced.

For US stock investors engaged in cross-border transactions, network stability is not only related to trading speed, but also directly affects investment returns. Professional VPS services can reduce network latency by over 80% compared to regular network connections.

1. Why are US stock trades afraid of network lag? Speed is money

The US stock market adopts a T+0 trading mechanism, with no limit on price fluctuations, and stock prices can fluctuate dramatically in an instant. Millisecond level delays may result in completely different transaction prices.

The impact of network latency on US stock trading mainly manifests in three aspects: market latency, execution latency, and confirmation latency. When the price seen has been delayed for a few seconds, or when a good trading opportunity cannot place an order due to network issues, the trader will be in an extremely passive state.

In a high-frequency trading environment, professional VPS can achieve direct connection to the exchange through dedicated lines, controlling the transmission delay of market trends within 3 milliseconds. This reduction in physical distance, combined with TCP/IP protocol stack optimization, allows traders to seize key window periods of order traffic.

2. Have you been hit by the five major culprits of internet lag?

The network issues in US stock trading mainly stem from five aspects. Market volatility is the primary factor: when market volatility is high, the processing volume of trading orders increases, leading to slow response of the trading system.

The quality of network infrastructure directly affects transmission efficiency: unstable network environment can affect the transmission speed of transaction instructions. The network line between servers in China and the United States needs to pass through multiple nodes, and any instability in any location may cause delays.

Software performance issues cannot be ignored: excessive software load or outdated versions may cause transaction delays. When processing the ITCH protocol data stream of NYSE (New York Stock Exchange), systems with insufficient performance cannot stably parse a large number of order messages.

Geographic location and distance are objective limitations: data needs to be transmitted over long distances, and even if transmitted through optical cables, there will be a certain physical delay.

Packet loss and routing issues have equally serious impacts: some service providers offer low latency network (LLN) options that can reduce packet loss rates from 0.3% to below 0.01%, which is crucial for algorithmic transactions.

3. Four tips to improve network stability and bid farewell to lagging troubles

Optimizing the stability of the US stock trading network requires a multi pronged approach, and the following are effective solutions that have been verified through practice.

Dedicated line access and network optimization

Choosing a professional financial grade network connection is the preferred solution: pulling point-to-point fiber directly from the customer to the service provider's data center, with fast and stable network speed. The optimization level of BGP (Border Gateway Protocol) routing provided by professional service providers will significantly affect the stability of intercontinental data transmission.

Using VPN and international dedicated line combination: On the basis of the customer's original network line, first create a VPN to the service provider's data center, and then access the US server through the international dedicated line. Although this plan is affected by the route from the customer to the service opportunity room, the cost is relatively low.

VPS deployment nearby

Adopting VPS service in the United States: As a global financial data center, the VPS service in the United States can provide nanosecond level timestamp synchronization (NTP protocol) due to its geographical advantage. Choosing VPS server rooms near financial centers such as New York and Chicago can greatly reduce data transmission distance.

Performance configuration selection: The average latency of dedicated instances equipped with 10Gbps network cards is 1.2ms, while shared VPS has fluctuations of 15-30ms. When processing real-time stock data, it is recommended to choose a high-performance VPS instance to ensure the stability of data processing.

Software and Protocol Optimization

Keep the software up-to-date: Using the latest version of trading software can reduce software load and improve operational efficiency.

Choose an efficient data transmission protocol: Although RESTful interfaces are easy to develop, WebSocket protocol is the mainstream choice for handling real-time market trends. Its full duplex communication feature allows for pushing 500+disk port updates per second.

Kernel level optimization: Using zero copy technology to reduce the data replication overhead between kernel state and user state, combined with kernel bypass scheme, can further reduce processing latency at the 3 μ s level.

AI assisted early warning system

Intelligent network monitoring: an AI based method for monitoring and warning of abnormal network devices, which can judge potential abnormal risks based on the environmental impact of the network devices and the relative deviation of each network device under normal operation.

Real time fault warning: This system can obtain the information of the network layer to be monitored, construct a network monitoring model based on the information of the network layer to be monitored, and provide timely warning through the network monitoring model when abnormalities are detected.

Future trends, technological evolution leading to new changes in the network

Network technology is rapidly developing, and several emerging trends are worth the attention of US stock traders.

The popularity of edge computing architecture has enabled VPS service providers to deploy micro data centers around exchanges in Chicago, New Jersey, etc., further reducing the delay to sub millisecond level.

The emergence of the new RDMA (Remote Direct Memory Access) network card enables cross server memory sharing, which will completely change the architecture design of distributed backtesting systems.

The advancement of quantum communication experimental networks is also affecting the financial sector: some financial data centers in the United States have begun testing real-time market transmission of QKD (quantum key distribution) encryption.

Regulatory technology update: The SEC (US Securities and Exchange Commission) is implementing the CAT (Comprehensive Audit Traceability) system, which requires all VPS service providers to retain complete order logs for at least 3 years. This will place higher demands on the compliance of network services.

The changes brought about by choosing high-quality VPS services are immediate: network latency has been reduced from 150ms to within 3ms, packet loss rate has been reduced from 0.3% to below 0.01%, and the daily volume of order messages that can be processed has increased by more than 50 times.

The chief technical officer of a quantitative fund in New York said: "We have deployed edge computing nodes next to the Chicago Board of Trade, and the transaction delay has decreased by 40%. Therefore, the yield of our arbitrage strategy in the first quarter of 2024 has increased by 2.3 percentage points."

Technology is always iterating, and the only constant is the pursuit of network stability. With the maturity of 5G millimeter wave communication and silicon photonics technology, real-time financial data transmission in the future will break through physical limits, opening up new possibilities for quantitative investment.

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