How Do Exchanges Ensure Fairness among Co-Located Clients?

Exchanges ensure fairness by standardizing the physical infrastructure for all co-located clients. This includes providing server cabinets at an equal cabling distance from the central matching engine, ensuring no client has a physical latency advantage over another.

They also provide access to market data feeds simultaneously to all participants. Rules are established to govern port allocation and bandwidth usage to prevent any single firm from monopolizing resources.

Essentially, they aim to make the physical setup identical, forcing competition to be based on algorithm quality, not cable length.