WebSocket Latency

WebSocket Latency measures the time delay between an exchange broadcasting a market event and a trading system receiving that data over a persistent, full-duplex connection. In cryptocurrency markets, this delay is a critical component of market microstructure, as it determines how quickly an algorithm can react to price changes or order book updates.

Latency is influenced by network topology, the physical distance between servers, and the exchange internal processing speed. Even millisecond-level differences can result in adverse selection, where an algorithm executes trades based on outdated information.

Sophisticated traders utilize colocation services to minimize this delay. High latency in volatile markets increases the risk of slippage and execution failure, necessitating constant monitoring of network performance.