Packet Sequencing

Packet sequencing involves assigning a unique identifier to each data packet so that the receiver can reassemble them in the correct order, even if they arrive out of sequence. In high-speed trading, network routing can cause packets to take different paths, leading to arrivals that are not chronological.

Without proper sequencing, a trading engine might interpret market data incorrectly, leading to faulty decisions. Sequencing ensures that the data is processed exactly as it was generated, which is fundamental for maintaining an accurate and reliable view of the market.

It is a critical mechanism for ensuring data integrity in distributed trading architectures.