Optimize tick-to-trade latency for digital assets exchanges and trading platforms on AWS: Part 2

This article explains how to optimize tick-to-trade latency for digital asset exchanges on AWS, focusing on EC2 compute optimization and achieving up to 29% tail latency reduction at p99.9.

• Reduce tail latency 29% at p99.9 using bare metal instances to eliminate hypervisor jitter
• Follow five-tier latency hierarchy: regional placement (milliseconds) down to OS tuning (microseconds)
• Use trading-latency-benchmark open source tool to establish baselines and measure optimizations
• Deploy market data ingestion in same AWS Region and Availability Zone as exchange
• Use Cluster Placement Groups with VPC Peering for lowest latency connectivity
• Select largest instance sizes or bare metal for exclusive physical host access
• Implement hardware packet timestamping for nanosecond-precision timing
• Use network-optimized instances with enhanced networking for 85% tail latency reduction
• Upgrade to Linux kernel 6.1+ with Ubuntu 6.12+ for latency-sensitive trading
• Apply OS tuning via provided Ansible playbook to reduce jitter and improve consistency
• Graviton c8g shows tight latency distributions with minimal tuning required

Effective latency optimization requires following the correct hierarchy of impact, testing iteratively with reproducible benchmarks, and understanding trade-offs between raw latency and feature availability across instance types.