Edge computing brings computation and data storage closer to where the data is being generated. Reducing latency issues can help a firm gain a competitive advantage in high-speed order execution. In traditional cloud-based architectures, data must travel from the trading platform to the cloud server and back, which can take significant time. In high-frequency trading, every millisecond counts, and even a slight delay can lead to significant losses.
Edge computing brings the processing power closer to the source of the data, reducing the latency between data capture and decision-making. Data processing also becomes more reliable with edge computing. Traditional cloud-based architectures can be vulnerable to network disruptions and other issues that can impact trading operations. With data processing done locally the dependence on external networks is reduced, thus increasing the reliability of the system. This can be particularly important in volatile markets, where even a brief interruption can lead to significant losses.
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