Introduction
In the ultra-competitive worlds of crypto arbitrage and high-frequency trading (HFT), every microsecond counts. Your algorithms are in a constant race against competitors to capitalize on fleeting opportunities. A mere microsecond delay can mean the difference between a profitable trade and a missed opportunity—or worse, a loss due to being outpaced by faster traders.
The Challenge
As a crypto arbitrageur, your strategies involve exploiting price discrepancies across multiple exchanges. Your algorithms gather information from two or more exchanges to execute contracts that ideally settle for a net gain. However, you’re not alone in this endeavor; competing algorithms are simultaneously attempting to front-run your trades. In such a scenario, latency isn’t just important—it’s everything.
For many traders, operations span global infrastructures—for example, executing trades that involve AWS in Tokyo and Alibaba Cloud in Hong Kong. The critical question is:
How can you ensure that the latency from your applications to these geographically dispersed exchanges is lower than that of your competitors at the exact moment of the trade?
High-frequency stock traders and arbitrageurs face similar challenges. In both crypto and traditional markets, the ability to measure and react to network latency in real-time is paramount.
Clockwork’s Innovative Solution
Clockwork offers a groundbreaking clock synchronization technology that provides you with the competitive edge needed in today’s fast-paced trading environments.
Key Features
- Real-Time Latency Measurement: Measure absolute one-way latency between any two hosts around the globe with an accuracy of tens of nanoseconds using hardware-sourced timestamps and hundreds of nanoseconds with software-sourced timestamps.
- Dynamic Path Selection: Detect latency changes between your servers and exchanges in real-time. Implement multiple parallel network links and enable your trading systems to choose the path with the lowest current latency at the moment of trade execution.
- No Specialized Hardware Required: Unlike traditional methods that rely on Precision Time Protocol (PTP) and expensive hardware, Clockwork’s solution requires only a software plugin on your hosts, virtual machines, or Kubernetes pods.
- Cloud Compatibility: Achieve high-precision latency measurements even in cloud deployments where traditional hardware-based solutions are impractical or unavailable.
How It Works
Clockwork’s technology synchronizes clocks across your global infrastructure with unparalleled precision:
- Sub-Microsecond Synchronization: Our software ensures that the time on any host is synchronized with others to within tens of nanoseconds when using hardware timestamps.
- Software-Only Deployment: Simply install our software plugin on your systems—no need for costly and complex hardware installations.
- Instantaneous Latency Insights: Your trading algorithms receive immediate, accurate latency data between different paths, allowing them to make informed decisions in real-time.
For example, while cloud providers like AWS and Alibaba Cloud offer time synchronization services, Clockwork delivers an order of magnitude greater accuracy, crucial for competitive trading strategies.
Clockwork Clock Sync Off vs. On
Without Clockwork:
- Median clock offset: 420.6 μs
- 90th percentile offset: 617.7 μs
With Clockwork:
- Median clock offset: 60 ns
- 90th percentile offset: 156 ns
Benefits for Traders
- Stay Ahead of Competitors: With real-time, precise latency measurements, ensure your trades are executed faster than your competitors’, increasing your chances of successful arbitrage.
- Optimize Trading Paths: Dynamically select the fastest network paths at the moment of trade, maximizing efficiency and profitability.
- Reduce Risk: Minimize the chances of failed or unprofitable trades due to unexpected latency spikes or network delays.
- Peace of Mind: Sleep better knowing that your trading infrastructure is operating at peak performance, and you’re not losing money due to latency disadvantages.
Use Cases
- Crypto Arbitrage Trading: Execute cross-exchange trades with confidence, knowing you’re leveraging the fastest possible connections.
- High-Frequency Stock Trading: Enhance your HFT strategies with ultra-low latency communications between your trading systems and exchanges.
- Hedge Funds and Financial Institutions: Improve arbitrage and front-running strategies by ensuring optimal latency performance across all trading activities.
Why Latency Matters More Than Ever
In markets where opportunities are measured in microseconds, having the lowest possible latency isn’t just beneficial—it’s essential. Without the ability to accurately measure and react to network latency, you risk being consistently outperformed by competitors who can.
Don’t let suboptimal latency erode your competitive edge. With Clockwork’s clock synchronization technology, you can ensure that your trading infrastructure operates with the precision and speed required to stay ahead in today’s markets.