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How Do Co-Location Services Specifically Benefit a Market Maker’s Fill Rate on a Derivatives Exchange?

Co-location reduces network latency by placing servers near the exchange, ensuring faster quotes and higher effective fill rates.
Greeks.Live14.11.25

How Do Co-Location Services Specifically Benefit a Market Maker’s Fill Rate on a Derivatives Exchange?

Co-location places the market maker's trading servers physically within the exchange's data center, minimizing the distance data must travel. This drastically reduces network latency, ensuring their quotes reach the RFQ platform and execution confirmation returns faster than competitors.

This speed is critical for maximizing the effective fill rate by preventing quotes from being stale.

How Does Co-Location of Servers Affect the Fairness of Order Execution on a CEX?
How Do Market Makers Adjust Their Quote Size Based on Observed Fill Rates?
What Is ‘Jitter’ and How Does It Contribute to Latency-Related Fill Rate Issues?
What Is ‘Co-Location’ in the Context of Exchange Trading?

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