The Trading Rig is a cloud-hosted computed instance that allows users to execute algorithmic trading strategies remotely. By locating trading rigs in the same Amazon AWS warehouses as exchanges themselves, users can trade with minimal latency from anywhere in the world.
We always knew we wanted to create entirely new order types for retail traders. But our idea for retail market-making on a mobile device, for example, could not be achieved with today’s infrastructure.
In order to allow users to set their market depth and play both sides of a spread (i.e. “synthesize a floating peg order”), orders must be placed and removed extremely quickly as the order book evolves.
But a signal takes too long to travel from the United States to Binance’s servers in Hong Kong, often ranging between 500 milliseconds and 2 whole seconds — order books change too quickly for this to work.
We invented the trading rig to give retail traders the ability to remotely control cloud-hosted, algorithmic trading bots co-located in the same AWS warehouses as exchange servers themselves.
This way, the long-distance signal only affects the user’s instructions to the bot — once the bot has received an instruction, it can operate on the user’s behalf with latency of around 15-30 microseconds. With this level of local access, a user can control a market-making bot in Hong Kong from his mobile phone in rural Iowa.
A global network of trading rigs allows users trading from anywhere in the world to have equally superb (“globally symmetrical”) latency on any exchange.
Beyond this, such a network has the ability to match order flow internally, obviating the need for centralized exchanges entirely. All the order flow in the world will instead be executed through this distributed, globally-symmetrical network of trading rigs.
The theory behind the Trading Rig is explored in further detail in founder James Andrew’s essay on the future of trading — The Art of Liquidity.