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Currently I trade trough IB. I run my HFT strategies (100 roundtrips per hour) but I think that latency is killing me and my profits are shrinking. I need the fastest possible brokers out there which meet the following requirements:

  1. Willing to deal with small accounts (50k). Hence lime is off the table.
  2. Has Java api (or it's easy to buy third party api for it)
  3. Can trade futures
  4. Offers colocation (US and EU)
  5. Offers data feed
  6. Can run on unix box
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  • $\begingroup$ Hi, maybe not an answer to your question but still ontopic: isn't it normal for the returns to get smaller since so many players are going after the same deals, therefore making the markets more efficient and making it harder to make a 'free buck'? $\endgroup$
    – gjvdkamp
    Commented Feb 21, 2011 at 17:01
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    $\begingroup$ off topic question? $\endgroup$
    – RockScience
    Commented Apr 27, 2011 at 4:18
  • $\begingroup$ user40, were you able to find a broker that meets your demands and beats IB? $\endgroup$
    – user1506
    Commented Oct 7, 2011 at 10:37
  • $\begingroup$ How did you determine that you were losing money due to latency ? Do you calculate the slippage ? $\endgroup$
    – silencer
    Commented Nov 24, 2011 at 0:02
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    $\begingroup$ Definitely off topic. Voting to close. $\endgroup$
    – Shane
    Commented Feb 11, 2012 at 0:24

5 Answers 5

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Look at Genesis Trading. Most of the sales guys there are kinda like used car salesmen but they will work with you. Starting up with 50K should not be a problem for them. The offer full depth of book feeds if you are colocated with them.

They do offer DMA and you can specify all routing instructions for your orders rather than getting stuck on IBs router.

You are not doing HFT but don't get discouraged. If your executions are not good and you are getting lots of slippage it may be due to IB.

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  • $\begingroup$ Very good. They look sound however they don't offer Java api. Is there a third party genesis api for Java so I can have head start? $\endgroup$
    – user40
    Commented Feb 22, 2011 at 7:46
  • $\begingroup$ Don't know. It should be easy to either implement their API or wrap the c++ API with JNI. You could also use a FIX engine with Java bindings. $\endgroup$
    – Steve Severance
    Commented Feb 23, 2011 at 4:35
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    $\begingroup$ @user40 You can use QuickFIX/J available at quickfixj.org as a Java binding to Genesis Trading's FIX API (FIX 4.2) -- their specification can be downloaded at gndt.com/automated/fix.htm $\endgroup$
    – John Carse
    Commented Oct 14, 2011 at 6:43
  • $\begingroup$ Is Genesis closing its business? $\endgroup$
    – Suminda Sirinath S. Dharmasena
    Commented Jun 3, 2012 at 7:23
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    $\begingroup$ I believe it is already closed. $\endgroup$
    – Steve Severance
    Commented Jun 4, 2012 at 2:07
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Here's a discussion/conclusion about the Flash Crash:

http://www.nanex.net/FlashCrashFinal/FlashCrashAnalysis_Theory.html

Quoting the above link:

"....A sale (or purchase) of 2,000+ contracts which rips through one-side of the depth of book in 50-100 milliseconds, will immediately overload many systems....."

My point is, HFT currently takes place in computers that are located next door to the exchange's computers and happen in milliseconds. Retail trades are not involved.

I now see that HFT has been discussed in the past:

How 'High' is the frequency in HFT?

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  • $\begingroup$ I agree... but the spectrum of frequencies you can trade on is huge... as the higher frequencies become more and more saturated... there will be more and more opportunities on other frequencies. Absolute frequency is not what this question is about. It's about faster platform relative to IB. $\endgroup$
    – user40
    Commented Feb 21, 2011 at 15:06
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    $\begingroup$ @user40 You might want to rephrase the question as a Medium Frequency Trade. The term HFT has a fairly specific meaning. As far as a faster-than-IB retail platform goes, I'm not aware of any. $\endgroup$
    – bill_080
    Commented Feb 21, 2011 at 15:24
  • $\begingroup$ I'd characterize 100 roundtrips an hour as HFT. That is 3 trades a minute. I'd say that is at the border where being colocated may be worth it. To me, Medium Frequency means holding periods of hours to days. $\endgroup$
    – Ted Graham
    Commented Dec 5, 2011 at 20:36
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Check out Advantage futures and the algoadvantage service they offer. You'll need to colocate a server with them and either purchase exchange connectivity software or certify your own app (this is only for derivatives trading..)

Also check out mbtrading. No java api but they offer a FIX interface so you can use quickfix. If you trade enough you can get a vps in their colo.. and you can probably colo a your own box there too, if needed.

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For retail solution IB is pretty good. There are some discussions about many broker in Elite Trader. Lime brokerage (ex Tower Res. Cap., now associated with wedbush) seam to be putting together a good offering. They have C++ API product called Cactus and also has Apama and OneTick. They have their own co-located servers and have fast routing also.

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There is also FTEN. I heard they offer risk control, multi-exchange access and, most important, ISO execution.

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