why i ask this question,i am from tamil nadu,my broker from bangalore but exchange from mumbai
Market have fluctuation for every second,so
is the Time of various location Matters?How
Hi,
Yes. Distance and Time matters in Stock Trading.
But you can take advantage only if you are doing some kind of HFT.
Broker’s office location doesn’t matter but where their server is located matters (Almost all brokers have their
servers located close to exch)
Zerodha OMS server is located in Mumbai Only (Co-Location within Exch)
Connectivity between Zerodha Server & Exch happens in microseconds(One Millionth of a Second)
&& between Zerodha Server & Trading Platform(Pi,Nest etc) happens in milliseconds (One thousandth of a Second)
It takes ~3ms to reach Zerodha OMS from Mumbai(Client Trading Platform)
&& ~60ms from Chennai
&& ~250ms from Singapore
You can check this by Just Ping Zerodha Server (180.179.153.153) from your PC.
A Layman Example:-
(Assume that Zerodha is the only Broker Connected to Exch)
Client A located in Mumbai
Client B located in Chennai
At 10:15:15 (Ignoring ms)
(Assume No undisclosed qty at each Bid/Ask level)
BidQty Bid Ask AskQty
96 455.6 455.8 125
45 455.5 455.9 125
36 455.4 456.0 56
125 455.3 456.1 89
145 455.2 456.2 78
Both clients placing a Buy MARKET Order with qty 125.
Client A will get Avg Price @ 455.8
Client B will get Avg Price @ 455.9
Client B paid extra 10 paise to get 125 shares due to the distance and Time.
The above is just an example, other then this so many factors affects like other broker’s clients orders,your network speed etc.
Technology is advanced very much today, you no need to go Mumbai to take advantage of distance,
You can just run a VPS in Mumbai and access it from Chennai.
Till now retail clients are unable to take advantage of distance as it is practically not feasible for client to have their trading setup in Mumbai,
But thanks to Cloud Computing, now client from any corner of India may have their trading setup very close to Zerodha Server.
Amazon and Microsoft have data-center in Mumbai and google is planning to launch.
Both Amazon & Microsoft have very high end infrastructure and very low cost compared to local cloud providers.
7 Likes