In trading and banking, speed is not cosmetic. A few extra milliseconds can change fill rates, widen slippage, and turn a profitable day into a flat one. The playbook below shows how fiber reduces delay, what to ask in contracts, and how to estimate payback with simple, transparent math.
🔎 At a glance
Latency baseline
~0.01 ms round trip per km of fiber
Plus small device overhead per hop.
Biggest wins
Shorter route and fewer conversions
Distance and hops drive delay.
Action
Pick shortest path and lock SLA
Then test failover with real traffic.
1️⃣ Latency basics for trading teams
Light in glass is fast but not instant. You can estimate delay with simple math and plan around it.
Rule of thumb
~5 microseconds per km one way
About 0.01 ms per km round trip before device overhead.
Why it matters
Route length equals delay
A path that is 100 km shorter can save about 1 ms round trip.
2️⃣ Fiber vs other links in plain English
| Option | Behavior | Good for | Limits |
|---|---|---|---|
| Shared business internet over coax or copper | Variable paths and higher jitter | Email and general office use | Not for trading or time-sensitive orders |
| Dedicated internet access over fiber (DIA) | Stable latency and symmetric speeds | Branch to cloud, smaller desks, back office | Latency still depends on route and upstream |
| Wavelength or private Ethernet over fiber | Predictable point to point path | Primary trading path between data centers | Needs clear latency and jitter SLA |
| Dark fiber with your optics | Shortest route under your control | Ultra low latency and deterministic flow | Higher cost and more operations work |
| Microwave or free-space optics | Lower delay in air on short routes | Specialized financial hops | Weather sensitivity and capacity limits |
3️⃣ Route math you can trust
Estimate round trip time from distance and device count. Use it to compare two paths before you buy.
Path A RTT estimate
0.00 ms
Path B RTT estimate
0.00 ms
Saved by shorter path
0.00 ms
Propagation model uses about 0.01 ms per km for round trip. Adjust device overhead to match your gear.
4️⃣ Trading value calculator
Turn latency savings into dollars using your own trade volume. The model is simple and transparent.
Daily benefit estimate
$0
Annual benefit estimate
$0
Simple payback
n/a
Set value per ms per trade from your backtests or slippage analysis.
5️⃣ Design patterns that work
Primary to exchange colocation
- Shortest physical route with published kilometers
- Private wave or dark fiber with route map and handholes
- Change windows avoid market open and close
Data center to data center
- Two diverse paths with documented building entries
- Low latency optics and minimal conversions per hop
- Monthly failover test with real trading traffic
Branch or desk to cloud
- Fiber DIA with clear upload targets and jitter caps
- SD-WAN policies pin critical flows to the best path
- Secondary circuit from a different provider and route
Market data feeds
- Separate transport from order flow for isolation
- Monitor 95th and 99th percentile latency
- Alert on jitter spikes that cause out of sequence events
6️⃣ Nine SLA guardrails before you sign
- Latency numbers by route with units stated as RTT in milliseconds
- Jitter cap with 95th and 99th percentile values
- Packet loss guarantee with automatic credits at thresholds
- Documented physical diversity from curb to core on both paths
- Mean time to repair targets for cut, node, and power events
- Change control windows that avoid market open, close, and key prints
- Handoff type and optics model to avoid conversion overhead
- Route map with distance in kilometers and first handhole photo
- Credits that apply automatically when the SLA is missed
7️⃣ Quick buyer checklist
Do now
- Measure current RTT and jitter on your trading paths
- Ask providers for route kilometers and device counts
- Run a one hour failover test outside market hours
Decide next
- Choose the shortest path for primary traffic
- Rent a diverse path that uses a different lateral and entrance
- Set up quarterly latency audits against the SLA
Use the route math to pick the shortest realistic path, lock in latency and jitter guardrails, and size the upgrade with your own trade numbers. When the numbers are visible and simple, fiber stops being a line item and starts acting like a performance tool for your desk.
