Low latency exchange race is on

So, which exchange offers the lowest latency trades? It's a good question, one that has bragging rights on the line. The Nasdaq has staked its claim: It has announced that it can process orders in 250 millionths of a second, down from 400 millionths six months ago, reports Securities Industry News. This improvement was driven by a its new Inet trading technology.

Is it now the leader in the field? The BATS Exchange, in June, said its average latency was at 395 millionths of a second. It says it will wait until Nasdaq posts its results on its website before ceding the unofficial title. Securities Industry News says that since BATS was launched in 2006, "the two exchanges have battled for the low-latency title;" they both define latency in the same way. All exchanges to some extent are bent on latency improvements, no matter how defined. The NYSE Arca certainly intends to also lower latency for its customers. It claims a "response time" of less than a millisecond. The NYSE's Super Display Book also has recorded some gains.

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