Latency What is Latency? Latency refers to the time delay between a user’s action and the corresponding response from a system. In networking, it measures the time taken for data to travel from source to destination. Explanation Low latency is crucial for applications like online gaming, video conferencing, and financial trading, where real-time performance is essential. It is influenced by factors such as distance, network congestion, and hardware. Practical Example of Latency A trading firm optimises its network to reduce latency, ensuring faster execution of trades and a competitive advantage in financial markets.