WebSocket Vs REST API

WebSocket and REST API are two primary methods for communication between a trader's interface and an exchange. REST API is typically used for sending discrete commands like placing an order or querying account balances, whereas WebSocket provides a persistent, two-way connection for real-time data streaming.

In the context of derivatives, WebSockets are essential for receiving live price updates and order book changes, as they offer much lower latency than the request-response cycle of REST. However, maintaining persistent WebSocket connections requires more server resources, creating a different type of system bottleneck.

Choosing the right communication protocol is a key design decision for building efficient and responsive trading platforms.