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Low Latency Meaning

A state where the delay (latency) in a system is kept to a minimum, often measured in milliseconds or even microseconds. In the world of "High-Frequency Trading" (HFT), low latency is the single most important technical requirement.

To achieve low latency, firms use "Co-location," placing their servers in the same physical building as the exchange's servers to reduce the distance data has to travel at the speed of light. They also use specialized hardware (FPGAs) that can process trades faster than a standard computer CPU.

For a regular user, "low latency" means the "Buy" button feels "snappy" and the price on the screen is the real price.

In the gaming and metaverse world, low latency is what prevents "lag," ensuring that when you move your character or make a trade, it happens instantly without a frustrating delay.

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