chicago colocation server needed upgrade.
1gbe connection = bottleneck.
current setup #
location: chicago datacenter (equinix CH1)
server: dell poweredge r640
- dual xeon gold 6248r (48 cores total)
- 256gb ram
- 4x 1tb nvme ssd (raid 10)
connection: 1gbe dedicated port
latency to exchanges:
- CME (chicago): 0.8ms
- CBOE (chicago): 1.2ms
- NYSE (new jersey): 4.5ms
cost: $450/month (server + power + 1gbe port)
the problem #
momentum strategy needs fast execution.
breakouts happen fast. milliseconds matter.
1gbe maxes out at ~125 MB/s.
when multiple positions exit simultaneously = packet queue.
estimated losing 50-150ms during high volume periods.
10gbe upgrade details #
new connection: 10gbe dedicated port
bandwidth: 1.25 GB/s (10x faster)
latency improvement: removes packet queuing bottleneck
cost increase: +$200/month ($450 → $650/month)
cost-benefit analysis #
cost: $200/month = $2,400/year
benefit calculation:
assume 50ms average latency reduction.
momentum strategy: 20 trades/month.
10 trades = entry, 10 trades = exit.
50ms * 20 trades = 1,000ms saved monthly.
slippage reduction:
assume 0.01% slippage reduction per trade.
20 trades/month * $2,000 avg position * 0.01% = $4/month saved.
wait that math sucks.
better justification #
real benefit: reliability not speed.
1gbe packet loss during volatility = missed fills.
10gbe = headroom for future growth.
planning to add more strategies.
more strategies = more simultaneous orders.
10gbe handles 50+ concurrent connections easily.
also: professional setup looks better.
if ever pitch prop firms or investors, infrastructure matters.
$650/month colocation = serious trader.
$450/month = maybe serious.
migration plan #
step 1: provision new 10gbe port (datacenter does this)
step 2: install 10gbe nic in server (sfp+ dual port)
step 3: configure network settings
step 4: test latency and throughput
step 5: cutover during weekend (low volume)
step 6: monitor for issues
datacenter confirmed 3-day turnaround.
scheduled for sept 20-23 (next week).
network configuration #
# install 10gbe nic drivers
modprobe ixgbe
# configure network interface
ip link set ens4 down
ethtool -s ens4 speed 10000 duplex full autoneg off
ip addr add 10.50.12.148/24 dev ens4
ip link set ens4 up
# verify connection
ethtool ens4 | grep Speed
# should show: Speed: 10000Mb/s
# test bandwidth
iperf3 -c test-server.equinix.com -t 60 -P 10
# should show ~9.4 Gbps (close to 10gbe theoretical max)
expected latency improvements #
current latency chain:
- algorithm detects signal: ~5ms
- order generation: ~2ms
- network transmission (1gbe): ~15ms
- broker processing: ~8ms
- exchange matching: ~3ms
total: ~33ms
after 10gbe upgrade:
- algorithm detects signal: ~5ms
- order generation: ~2ms
- network transmission (10gbe): ~3ms (12ms improvement)
- broker processing: ~8ms
- exchange matching: ~3ms
total: ~21ms (36% faster)
testing methodology #
will run A/B test first week.
test 1: paper trade 50 signals on 1gbe
test 2: paper trade same 50 signals on 10gbe
metrics:
- fill latency (order sent → fill confirmed)
- slippage (expected price vs actual fill)
- packet loss during volatility spikes
if improvement >10%, worth the cost.
if improvement <5%, maybe overkill.
home network for comparison #
san diego setup:
dell poweredge r740xd at home.
ubiquiti 10gbe switch.
att fiber 5gbe internet.
home → chicago latency: ~45ms.
why colocation still matters:
45ms home-to-chicago.
0.8ms chicago-to-CME.
45ms vs 0.8ms = 56x faster.
colocation for execution.
home for research and backtesting.
infrastructure costs summary #
chicago colocation (after upgrade):
- server + power + 10gbe: $650/month
san diego home:
- att fiber 5gbe: $180/month
- power for servers: ~$120/month
data feeds:
- polygon.io professional: $199/month
- thetadata: $50/month
total infrastructure: $1,199/month = $14,388/year
trading capital: $360k
infrastructure as % of capital: 4% annually
reasonable for professional setup.
comparison to alternatives #
cloud vps (aws/gcp):
- cost: $800-1200/month for equivalent specs
- latency: worse (shared infrastructure)
- control: limited (their rules)
no colocation:
- cost: $0/month
- latency: 45ms+ from home
- missed opportunities: high
colocation worth it for serious algo trading.
ROI calculation #
if 10gbe upgrade improves fills by 0.01% on 50% of trades:
20 trades/month * $2,000 avg * 50% affected * 0.01% = $2/month.
wait that’s $24/year vs $2,400/year cost.
fuck. math doesn’t support upgrade.
real reason i’m doing it #
headroom.
planning to scale up.
more strategies = more orders = more bandwidth needed.
1gbe is fine today.
10gbe is insurance for tomorrow.
also i like having best infrastructure.
can afford it. trading profitable. worth it for peace of mind.
A’s reaction #
showed her the upgrade plan yesterday.
A: “you’re spending $2,400/year to maybe save $24?”
me: “it’s about headroom. future-proofing.”
A: “or you just like having a 10gig pipe.”
me: “…that too.”
she gets it. she’s a developer. understands over-engineering for fun.
next steps #
sept 20: datacenter provisions 10gbe port
sept 21: install 10gbe nic, configure network
sept 22: test and validate latency improvements
sept 23: cutover production trading to 10gbe
sept 24-30: monitor performance, collect metrics
will post results in october.
4:31am saturday. upgrading chicago colocation to 10gbe next week. overkill but worth it for headroom. $650/month total cost.
-AK