Aquis Slashes 'Jitter' in Cloud Project

Aquis Technologies, the software and technology arm of Aquis Exchange, last week announced a successful proof-of-concept (PoC) with Amazon Web Services (AWS) and Singapore Exchange (SGX), which it says demonstrates that complex exchange architecture can work as efficiently in the cloud as in physical datacenters when it comes to latency variation, or jitter.  

When a major exchange moves its core matching engine to the cloud, challenges include ensuring the same low latency for the transfer of data as in an on-premise environment, as well as reducing jitter. Brokers’ smart order routers are tuned by, among other things, the latency profile of the venues they can trade on to try to get as much of the order filled at the best price possible due to regulations around best execution.

Being able to rely on a consistent latency profile is an important requirement. Adrian Ip, director of product management and technology sales at Aquis Exchange, says the higher the jitter range, the less a smart order router or a trading algorithm can rely on receiving confirmation within a set timeframe. 

“Jitter is sort of the enemy of highly deterministic, high-frequency matching engines,” he says. “That is why we have a lot of very expensive physical hardware in datacenters today—first of all, to make it fast, but also to minimize jitter.”

In December 2019, AWS launched a multicast service in the cloud for its AWS Transit Gateway, a cloud router that allows the ushering of data between different AWS environments. When WatersTechnology spoke with AWS earlier this year, the firm confirmed working on a number of pilots for the new offering with some unnamed exchanges.

When the Aquis project with AWS first began in late spring this year, the range of jitter was 200 microseconds. “To have such a broad range of jitter was really quite troubling at first,” Ip says.

In contrast, with the Aquis Trading Protocol (ATP)—its own binary trading protocol—a matching engine would take 13 microseconds to respond to a message from the outside world, with a jitter range of just 1 microsecond.

Working closely with AWS, it was able to significantly lower the jitter range to 4 microseconds in the cloud for the PoC. Aquis had direct access to AWS’s transit gateway development team, Ip says, but declines to go into the specifics of how it achieved the reductions in jitter, describing it as “secret ingredients.”  

“This is all using completely standard AWS infrastructure. We are not looking at bare metal, or any of the sort of fancy reserved hardware that underpins virtualized machines, or anything like that,” Ip says.

The latency achieved in the project is in the range of 100 to 200 microseconds, compared to 13 microseconds on-premise. So while the results may be an important step in exchanges’ bid to move to the cloud, when it comes to ultra-low latency trading environments, there is still more work to be done.