API Throughput

API throughput refers to the maximum number of requests or data messages an exchange's interface can process within a given time frame. In high-volume environments, hitting the API rate limit can prevent a trader from updating their positions or canceling orders, leading to significant risk.

Exchanges implement these limits to protect their systems from being overwhelmed by traffic. Traders must design their systems to operate efficiently within these constraints, often using batching or optimized communication protocols.

High throughput is essential for algorithms that require constant interaction with the market. If a trader's infrastructure cannot handle the required throughput, they may suffer from execution delays or system errors during critical market events.