Latency
a.k.a. Lag
The delay between sending an order or price and it arriving where it needs to go, measured in…
In plain English
The delay between sending an order or price and it arriving where it needs to go, measured in milliseconds or less.
Latency is the travel time of information. When you click buy, your order has to travel to the broker's server and on to the market. Every millisecond is a chance for the price to change.
For most retail traders, a little latency costs little. For high-frequency firms, it is everything, which is why they rent server space next door to exchanges. Running a trading bot on a server close to your broker (a VPS) can reduce it.
Keep this word for good
Your free Private Swap Lounge saves the terms you’ve learned and quizzes you on them. Portal under construction. Expected delivery date is December 01, 2026.