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==Communications== [[Online game]]s are sensitive to latency ([[Lag (video games)|lag]]), since fast response times to new events occurring during a game session are rewarded while slow response times may carry penalties. Due to a delay in transmission of game events, a player with a high latency internet connection may show slow responses in spite of appropriate [[reaction time]]. This gives players with low-latency connections a technical advantage. === Capital markets === Joel Hasbrouck and Gideon Saar (2011) measure latency to execute financial transactions based on three components: the time it takes for information to reach the trader, execution of the trader's algorithms to analyze the information and decide a course of action, and the generated action to reach the exchange and get implemented. Hasbrouck and Saar contrast this with the way in which latencies are measured by many trading venues that use much more narrow definitions, such as the processing delay measured from the entry of the order (at the vendor's computer) to the transmission of an acknowledgment (from the vendor's computer).<ref>{{cite web |last=Hasbrouck |first=Joel |title=Low-Latency Trading |author2=Saar, Gideon |url=http://www2.binghamton.edu/som/files/GideonSaar.pdf |access-date=18 July 2011 |page=1 |archive-url=https://web.archive.org/web/20111111224846/http://www2.binghamton.edu/som/files/GideonSaar.pdf |archive-date=11 November 2011 |url-status=dead }}</ref> Trading using computers has developed to the point where millisecond improvements in network speeds offer a competitive advantage for financial institutions.<ref>{{cite news |url=https://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10736960/High-frequency-trading-when-milliseconds-mean-millions.html |title=High-frequency trading: when milliseconds mean millions |work=The Telegraph |access-date=2018-03-25}}</ref> ==={{Anchor|PACKET-SWITCHED}}Packet-switched networks=== {{See also|Bandwidth-delay product|Network delay}} '''Network latency''' in a [[packet-switched]] network is measured as either [[One-way delay|one-way]] (the time from the source sending a packet to the destination receiving it), or [[round-trip delay time]] (the one-way latency from the source to the destination plus the one-way latency from the destination back to the source). Round-trip latency is more often quoted, because it can be measured from a single point. Many software platforms provide a service called [[Ping (networking utility)|ping]] that can be used to measure round-trip latency. Ping uses the [[Internet Control Message Protocol]] (ICMP) ''echo request'' which causes the recipient to send the received packet as an immediate response, thus it provides a rough way of measuring round-trip delay time. Ping cannot perform accurate measurements,<ref>{{cite web|url=http://www.c0t0d0s0.org/archives/7479-Dont-misuse-ping!.html|title=Don't misuse ping!|access-date=29 April 2015|archive-date=12 October 2017|archive-url=https://web.archive.org/web/20171012190836/http://www.c0t0d0s0.org/archives/7479-Dont-misuse-ping!.html|url-status=dead}}</ref> principally because ICMP is intended only for diagnostic or control purposes, and differs from real communication protocols such as [[Transmission Control Protocol|TCP]]. Furthermore, [[Router (computing)|routers]] and [[internet service provider]]s might apply different [[traffic shaping]] policies to different protocols.<ref>{{cite web | url = http://www.knowplace.org/pages/howtos/traffic_shaping_with_linux/network_protocols_discussion_traffic_shaping_strategies.php | archive-url = https://web.archive.org/web/20070109033459/http://www.knowplace.org/pages/howtos/traffic_shaping_with_linux/network_protocols_discussion_traffic_shaping_strategies.php | title = Network Protocols Discussion / Traffic Shaping Strategies | archive-date = 2007-01-09 | year = 2005 | author = Shane Chen | website = knowplace.org }}</ref><ref>{{cite web |url=http://aitaseller.wordpress.com/2012/09/19/basic-qos-part-1-traffic-policing-and-shaping-on-cisco-ios-router/ |title=Basic QoS part 1 β Traffic Policing and Shaping on Cisco IOS Router|work=The CCIE R&S |date=19 September 2012|access-date=29 April 2015}}</ref> For more accurate measurements it is better to use specific software, for example: [[hping]], [[Netperf]] or [[Iperf]]. However, in a non-trivial network, a typical packet will be forwarded over multiple links and gateways, each of which will not begin to forward the packet until it has been completely received. In such a network, the minimal latency is the sum of the transmission delay of each link, plus the forwarding latency of each gateway. In practice, minimal latency also includes queuing and processing delays. [[Queuing delay]] occurs when a gateway receives multiple packets from different sources heading toward the same destination. Since typically only one packet can be transmitted at a time, some of the packets must queue for transmission, incurring additional delay. [[Processing delay]]s are incurred while a gateway determines what to do with a newly received packet. [[Bufferbloat]] can also cause increased latency that is an order of magnitude or more. The combination of propagation, serialization, queuing, and processing delays often produces a complex and variable network latency profile. Latency limits total [[throughput]] in reliable two-way communication systems as described by the [[bandwidth-delay product]]. ===Fiber optics=== Latency in [[optical fiber]] is largely a function of the [[speed of light]]. This would equate to a latency of 3.33 [[ΞΌs]] for every kilometer of path length. The [[index of refraction]] of most fiber optic cables is about 1.5, meaning that light travels about 1.5 times as fast in a vacuum as it does in the cable. This works out to about 5.0 ΞΌs of latency for every kilometer. In shorter metro networks, higher latency can be experienced due to extra distance in building risers and cross-connects. To calculate the latency of a connection, one has to know the distance traveled by the fiber, which is rarely a straight line, since it has to traverse geographic contours and obstacles, such as roads and railway tracks, as well as other rights-of-way. Due to imperfections in the fiber, light degrades as it is transmitted through it. For distances of greater than 100 kilometers, [[Optical amplifier|amplifiers]] or [[Regenerator (telecommunication)|regenerators]] are deployed. Latency introduced by these components needs to be taken into account. ===Satellite transmission=== Satellites in [[geostationary orbit]]s are far enough away from Earth that communication latency becomes significant β about a quarter of a second for a trip from one ground-based transmitter to the satellite and back to another ground-based transmitter; close to half a second for two-way communication from one Earth station to another and then back to the first. [[Low Earth orbit]] is sometimes used to cut this delay, at the expense of more complicated satellite tracking on the ground and requiring more satellites in the [[satellite constellation]] to ensure continuous coverage.
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