ClaimArticle
Ultra-low latency is no longer a competitive moat in itself at trading firms; as competitors squeezed performance out of their systems, the focus shifted to fine-tuning trading strategies, and HFT now evolves faster than other industries because profitable strategies don't last long.
Optiver's fastest trading system operates in the sub-nanosecond realm, yet even this ultra-low latency is no longer a moat by itself. Since competitors have matched the performance, the competitive edge has moved to fine-tuning strategies and building better models, and HFT evolves faster than other industries. ✦ AI generated
The Pragmatic Engineer · The Pragmatic Engineer · 2026-08-11 · original ↗
However, in this niche, even ultra-low latency is no longer a competitive moat in itself. As competitors have squeezed performance out of their systems, focus has shifted towards fine-tuning of trading strategies. Today, Optiver invests substantially more in building better models than it does in lowering latencies.
Read full article ↗excerpt · fair-use quotation
Around this claim
This moment responds to
explains mechanism → At Optiver, the shift from reducing latency to building better AI models is complete: 'latency is the floor' and AI information models have become the key differentiator, with the company now investing substantially more in building better models than in lowering latencies.The Pragmatic Engineer · The Pragmatic Engineerexplains mechanism → The trading evolution across four eras - from pre-electronic trading floors (pre-1990s), to the first wave of electronification (1990s), to automated trading (late 1990s-2015), to quantitative trading with ML (2015-present) - has weeded the market, so that today only a handful of truly large firms remain because serious prop shops must invest hundreds of millions in research clusters.Alex Itkin · The Pragmatic Engineergives example → There is no such thing as a durable moat in business — any competitive advantage can vanish tomorrow, and the only way to win long term is to keep developing new services and better ways of doing things.Glenn Fogel · No Priors