Low latency messaging describes a computer network that is optimized to process a very high volume of data messages with minimal delay (latency). These networks are designed to support operations that require near real-time access to rapidly changing data.
What types of messages are transmitted in low latency messaging?
The word messaging in this context refers to any data transmitted via a higher level computing protocol. It is a unit of data relayed for immediate, real-time processing. Low latency messaging, then, refers simply to computing systems that are capable of processing a high frequency of data in milliseconds.
Where is low latency messaging used?
Low latency messaging generally refers to the systems used in capital markets firms to support high-frequency trading. High frequency trading is entirely automated, with trades executed based on the processing of algorithms that optimize trades based on the changing market prices. Capital markets firms compete on the speed with which these algorithms can be processed and trades executed. Therefore, investing in low latency messaging infrastructure is often justified.
