Analysis of order execution speed on different crypto exchanges

When trading digital assets, speed is of the essence. Executing orders a fraction of a second ahead of the market makes a significant difference between profit and loss. It is not surprising that the cryptocurrency platform Deribit decided to analyze the speed of closing orders, since it showed the best results. In addition to Deribit, the analysis included exchanges Bitfinex, Binance, Coinbase, Bitmex and Okex.

The most liquid pair was tested on each exchange to determine the time required to add a limit order and execute a market order.

These tests were repeated every minute for several weeks. Most of the exchanges tested were unable to complete a single task in less than 10 milliseconds; the Okex exchange showed the worst result. Some exchanges have seen a significant number of cases where a transaction took more than one second, with Bitmex having the largest percentage of such orders.

Order speed is generally not a big concern for retail investors who do not rely on instant execution when buying and selling assets. However, it has implications for professional traders, especially in the Wall Street and cryptocurrency markets. On derivatives trading exchanges where cryptocurrencies can be traded with up to 100x leverage, timing is everything. And for trading strategies that depend on a quick response to market news, order speed can be critical. Many financial brokers base their business model on high-frequency trading (called "scalping"), relying on algorithmic trading with low latency, high speed and high shares of orders placed relative to the number of trades executed.

The Deribit platform used the following analysis method:

We measured the time from the initial order to confirmation that the order was placed. To compensate for delays beyond the control of the exchange, we have defined a latency for the request API. The duration of these requests was subtracted from the duration of the order requests, and the remaining time was the order execution time.

The following are the results of the analysis:

• Binance - average order execution latency of 37.2 milliseconds, with 0.1 percent of orders being executed within 10 milliseconds, and 1.1 percent taking more than 1 second.

• Bitfinex - average order execution latency of 156 milliseconds, with 0 percent of orders being executed within 10 milliseconds and 1.5 percent taking more than 1 second..

• Bitmex - Average order execution latency of 1.11 seconds, with 13.4 percent of orders executed within 10 milliseconds, and 20.8 percent over 1 second.

• Coinbase - Average order execution latency of 33.0 milliseconds, with 0.2 percent of orders executed within 10 milliseconds, and 0.1 percent - more than 1 second.

• Deribit - average order execution delay 6.1 milliseconds, with 89.6 percent of orders executed within 10 milliseconds, and 0 percent took more than 1 second.

• Okex - average order execution delay 127 milliseconds, with 0 percent of orders executed within 10 milliseconds, and 0.2 percent - more than 1 second.

There is very strong competition between exchanges, especially among those who trade derivatives. While successful margin trading requires much more than just speed, its importance will undoubtedly grow as competition intensifies and traders are forced to compete for better performance.

According to news.bitcoin.com