Eurex, the European derivatives exchange, has reported that customers’ average roundtrip times for futures contracts halved to five milliseconds following the introduction of its Enhanced Transaction Solution last month.
Eurex told theTRADEnews.com that the five second calculation refers to the time between an order being sent by a client using its co-location services and receipt of a confirmation. The exchange added that it worked on a "rule of thumb" that every 100km added approximately an extra millisecond of latency.
The exchange said that users of its co-location services were experiencing round trips as low as one millisecond for single order transactions. The Enhanced Transaction Solution (ETS) is an optional access option for Eurex clients who may also still use the exchange’s existing MISS interface. At present, up to 30% of the daily order volume for benchmark products such as DJ Euro STOXX 50 futures and DAX futures is entered via the new interface.
“ETS is primarily aimed at customers with transaction-intensive and algorithmic trading strategies. The new interface is limited to the management and maintenance of order and quotes,” said Jürg Spillmann, Deputy CEO of Eurex, in a statement.
Eurex said the next stage of its Technology Roadmap would be the roll-out of a real-time risk management function in the final quarter of 2008, which will allow participants to obtain a permanent evaluation of their risks throughout the trading day based on current market conditions.