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Order Latency Meaning

The time delay between a user submitting an order and the exchange acknowledging and placing it in the order book. In the world of crypto volatility, latency is a killer.

A delay of 500 milliseconds can mean the price has already moved 1%, turning a profitable trade into a loss. Exchanges compete on latency.

"Low Latency" is a key selling point for attracting institutional market makers. Latency is caused by network distance, the efficiency of the exchange's matching engine code, and the load on the system.

Traders use "Co-location" services to place their trading servers physically next to the exchange's servers to reduce network latency to the absolute minimum (microsecond scale).

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