Achieving Ultra-Low Latency in Trading: A Guide for Engineers

In high-frequency trading (HFT), every microsecond matters. Achieving ultra-low latency isn’t just an advantage—it’s a necessity. Hardware is at the core of this performance, and Solarflare NICs have been my go-to for building optimized trading systems. In this article, I’ll share insights from my experience with Solarflare and the key techniques that drastically reduce network latency.

The Role of Solarflare NICs

When you’re building systems for HFT, traditional network interfaces won’t cut it. That’s where specialized NICs like Solarflare come in. They offer features like hardware-based timestamping and kernel bypassing that eliminate much of the overhead, significantly reducing packet processing times.

OpenOnload: A Game Changer for Kernel Bypass

One standout feature of Solarflare NICs is OpenOnload, a kernel bypass technology. OpenOnload allows applications to communicate directly with the NIC, bypassing the OS kernel entirely. This eliminates delays caused by system calls, context switching, and the usual layers of processing. The result? Dramatically reduced latency.

Key features of OpenOnload include:

• Kernel Bypass: By skipping the kernel’s involvement, you minimize overhead.
• Zero-Copy Networking: Data moves directly between the NIC and user space without unnecessary copying.
• Throughput Optimization: Reduces delays and optimizes performance, making it perfect for low-latency trading.

You can further fine-tune your network setup by disabling interrupt moderation, enabling RSS (Receive Side Scaling), and using Jumbo Frames to enhance performance.

Time Synchronization with PTP: Accuracy at the Microsecond Level

Accurate time synchronization is crucial in HFT. The Precision Time Protocol (PTP), supported by Solarflare NICs, enables microsecond-level accuracy, ensuring that trading systems stay precisely in sync with market exchanges. Hardware timestamping ensures minimal time drift, helping trades execute at the exact right moment.

Key Components of a PTP Setup

1. Grandmaster Clock: At the heart of your PTP system, the Grandmaster Clock provides the time source, typically from GPS satellites or other high-precision references. For redundancy, you can configure backup time sources like atomic clocks to avoid disruption if GPS fails.
2. PTP-enabled Switches and Routers
3. Low-Latency Switches: Specialized switches from companies like Arista or Cisco are used to forward PTP messages with minimal delay, preventing time drift across the network.

PTP in the Data Center

In trading environments, servers are often colocated in data centers for proximity to exchanges. PTP signals are distributed throughout the data center, ensuring every server, router, and switch stays synchronized. Multiple boundary clocks are deployed to maintain time accuracy, and many setups include dual PTP systems—one via GPS and one from an atomic clock backup for uninterrupted time continuity.

Low-latency fiber within the data center further ensures that delays in propagating PTP messages are minimized, allowing precise time synchronization even as trades are executed at breakneck speeds. Fun fact: There are R&D companies dedicated to low-latency fiber.

Few Key Considerations for Setting Up PTP

• Cable Length and Latency: In ultra-low latency setups, the length of your fiber optic cables can introduce delay. Every foot counts, and cable lengths are often precisely measured to account for these tiny delays.
• Jitter Management: Non-PTP-aware devices or inconsistent network performance can introduce jitter. Carefully selecting your switches and designing your network topology are critical for maintaining consistency in time synchronization.
• Redundancy and Failover: Downtime can be costly, so ensuring you have multiple Grandmaster Clocks and backup time sources (e.g., atomic clocks) is essential. Boundary clocks and switches should be configured for automatic failover to ensure no time sync disruptions.
• Network Congestion: To ensure PTP remains accurate, many networks isolate PTP traffic or dedicate network segments to it, preventing congestion from degrading time synchronization accuracy.

Wrapping Up

Setting up a high-performance trading system requires a combination of the right hardware and smart network design. With Solarflare NICs and PTP-enabled infrastructure, you can achieve sub-microsecond latency, ensuring your trades hit the market at the perfect moment. Whether it’s leveraging OpenOnload to bypass the kernel or fine-tuning your PTP setup, these techniques will keep your trading systems fast, precise, and ready to handle the demands of modern financial markets.

I'll cover CPU pinning and other CPU optimizations for low latency trading in my next article.