Latency
Latency refers to the delay that occurs between the transmission of information from a source and its reception at the destination. A specific instance of this is the time taken from when an order is placed in an electronic trading system to when that order is executed.
This delay can be influenced by various factors, including geographical distance and bandwidth congestion. In simpler terms, latency is a measure of delay.
More specifically, latency indicates the time that elapses between a price quotation being provided and the confirmation of a transaction. It can arise from a variety of technological limitations.
Poor network performance can result in communication latency, which is the time required for communication between two network nodes. On the other hand, insufficient server processing power can lead to application latency, a delay that occurs because the response necessitates extensive processing before it can be sent.
Additionally, inadequate computer processing power can cause memory latency, which is the time needed to write or access data in memory within a computer program. This can occur, for example, when performing a margin check on a client.
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