Latency Takes the Lead

Co-location is like having your own floor trader in the exchange who is less than 1 millisecond away from the action. When trading platforms were hundreds of milliseconds away with wide variance, it mattered less. Now, some platforms will respond in under 1 millisecond, while others do so within 10 milliseconds across direct fiber-optic networks, so "locals" can trade perhaps 10 to 50 times as fast as remote servers, which provides enormous potential for front-running slower participants. Such