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How Does Co-Location Benefit HFT Crypto Arbitrage Strategies?

Co-location places servers near the exchange's matching engine, minimizing physical distance and network latency.
Greeks.Live23.11.25

How Does Co-Location Benefit HFT Crypto Arbitrage Strategies?

Co-location involves placing the HFT firm's servers physically in the same data center as the exchange's matching engine. This drastically reduces network latency because the data only travels a very short physical distance.

This speed advantage allows the co-located arbitrage bot to be among the first to react to market data and execute trades, maximizing the chance of capturing fleeting arbitrage opportunities before others.

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