API Execution Latency

API execution latency is the delay between a trader sending an order through an exchange's Application Programming Interface and the exchange receiving and processing that order. This latency includes the time taken for the order to travel over the internet, the exchange's internal processing time, and the time to match the order.

For high-frequency and automated traders, even a few milliseconds of API latency can be the difference between a profitable trade and a loss. Exchanges with poor API performance or those that struggle to handle high request volumes during volatility are major sources of this risk.

If an order is delayed, the market price may have moved, resulting in a worse execution price than intended. Traders must constantly monitor their API latency and optimize their connectivity to the exchange to remain competitive and manage their execution risk effectively.