TL;DR:
- Every API trader on Kraken routes to the same location and derivatives trading engines. What differs is THE path and latency.
- Cloud connectivity is available for individual and institutional traders. Hosted colocation, also available for both, is offered through a provider subscription. Direct colocation, a cross-connection with Kraken’s infrastructure, is available only to institutional VIP customers and requires specific qualifications.
- For institutional traders, dedicated private network routes are also available between major global hubs.
New to Kraken API Unlock? Read blogs 1-4 here.
Every API trader reaches a point where they ask themselves the same question: Is my connection fast enough or is latency costing me an advantage?
For individual traders executing systematic strategies, cloud connectivity is more than enough, and understanding why is as useful as knowing when it stops being true. For institutional traders, high-frequency trading firms, market makers, and algorithmic desks, the answer is often that the gap between where they are and where they could be is significant, and the difference has a direct cost.
Does Latency Really Affect Your Kraken Trading Strategy?
Faster execution means less market impact, fewer adverse executions and more control over when and how your orders arrive. The question is not whether latency matters. This is the case for every trader. The real question is how important this is to your specific strategy and whether reducing it would significantly change your results.
For some strategies, the answer is decisively yes. Institutional traders with latency-sensitive execution, high-frequency trading firms, and market makers (in particular) must update and cancel orders faster than other participants can trade against stale prices. The window between a market movement and the execution of a stale order is narrow on competitive sites.
For strategies like trend following, rebalancing, and macro systematics, the quality of your data, signal, and risk management will determine results more than incremental gains in execution speed.
The same principle applies to individual API traders. If your strategy relies on reacting quickly to market events, even at a moderate frequency, it is worth measuring your current latency and establishing a latency baseline.
What connectivity options does Kraken offer for low latency trading?
Cloud connectivity – individual and institutional traders
Connect via public endpoints from an AWS cloud environment in London. IP whitelisting is available for added security. For most individual API traders running strategies that are not latency critical, this is sufficient.
Hosted colocation — individual and institutional traders
Kraken works with colocation providers whose infrastructure is on the same campus as Kraken’s business infrastructure. Available to individual and institutional traders, including market makers and high-frequency trading firms, through a subscription with a colocation provider.
Dedicated global network routes — institutional traders
For institutional traders, hedge funds, trading firms and high-frequency trading operations, dedicated private network routes are available between major global hubs. These are private, dedicated connections rather than shared Internet routes. Contact your Kraken Relationship Manager for more details.
Direct colocation — institutional VIP clients only
Direct colocation provides a physical connection to Kraken’s business infrastructure. It is particularly aimed at institutional traders, high-frequency trading companies and market makers who wish to maintain control of their infrastructure and are already present in the establishment.
Access requires institutional VIP customer status, a signed NDA and existing or planned infrastructure in Equinix London. To begin the onboarding process, contact your Kraken Relationship Manager.
Which API protocol should you use for low latency trading on Kraken?
The level of connectivity and choice of API protocol are related, but they are separate decisions. Kraken offers three API protocols: REST, WebSocket and FIX 4.4.
The REST API covers market data, account data, trading, financing and related functions on Spot and Futures. It is suitable for portfolio queries, recurring order placements, and account workflows. For real-time streaming or session-based execution, use WebSocket or FIX
WebSocket v2 is the general protocol recommended for most API traders. It enables real-time order entry, streaming of market data, access to L3 books and account updates through a single persistent connection.
FIX 4.4 is designed for institutional traders, high-frequency trading firms, market makers and algorithmic trading desks that require deterministic message sequencing and session-based risk controls.
FIX uses a persistent routing model in which each session is linked to a specific FIX Gateway instance and each message follows the same path to the trading engine, thus preserving message order. This is distinct from WebSocket, where connections are load balanced and two sequential messages can follow different paths to the trading engine’s incoming queue. The API episode unlocked on FIX 4.4 covers this in detail.
How to get access to colocation on Kraken?
- For cloud connectivity, individual and institutional traders can connect to Kraken public endpoints.
- For hosted colocation, available for individual and institutional traders, visit connectivity guide to see available providers and get started.
- For dedicated global network routes, institutional traders should contact their Kraken relationship manager.
- For direct colocation, institutional traders should contact their Kraken relationship manager to begin the onboarding process. Access requires institutional VIP customer status, a signed NDA and infrastructure in Equinix London.
FAQs
Does latency matter for API trading on Kraken?
Faster execution means less market impact and more control over how your orders arrive. Its importance depends on your strategy. Institutional traders with latency-sensitive execution, high-frequency trading firms, market makers and arbitrage desks are most affected. For most individual API traders running strategies that are not latency critical, cloud connectivity is usually sufficient.
What connectivity options does Kraken offer?
Cloud connectivity through public endpoints, hosted colocation through colocation providers, dedicated global network routes for institutional traders, and direct colocation for institutional VIP clients with specific requirements.
Do all API traders connect to the same trading engines on Kraken?
Yes, individual and institutional traders are moving towards the same spot and derivatives trading engines. What differs is the path to these engines, the resulting latency, and the access requirements for each tier.
Who can access colocation on Kraken?
Hosted colocation is available to individual and institutional traders, including market makers and high-frequency trading firms, through a subscription with a colocation provider. Check the connectivity guide to see the available options. Direct colocation requires institutional VIP customer status, a signed NDA and existing or planned infrastructure in Equinix London. Contact your Kraken Relationship Manager to begin the process.
Which API protocol should I use for low latency trading on Kraken?
WebSocket v2 is the general protocol recommended for most API traders. For institutional traders, high-frequency trading firms, and market makers requiring deterministic message sequencing and session-based risk controls with colocation latency, FIX 4.4 is available. Read The API episode unlocked on FIX 4.4 for more information.
What connectivity options are available for institutional traders connecting from other regions?
Dedicated private network routes are available for institutional traders connecting between major global hubs. Contact your Kraken Relationship Manager for more details.
