The network is in charge of making the computers communicate with each other. Networks need a physical layer to share information. Choosing the correct media (communication layer) is critical for the network to reach a given speed or reliability, or even security. In trading finance, we use the following:

• Wire: Electrical currents that are limited in bandwidth
• Fiber: More bandwidth
• Microwave: An easy-to-install, large bandwidth, but can be impacted by storms

The media will vary, depending on the type of trading strategy you're using. Choosing the correct media is part of the first layer of the network in the ISO model. This layer is called the physical layer. On top of this one, there are six more layers describing the type of communication. The protocol that we will be using in trading finance is the IP protocol. This is a part of the network layer of the ISO model. This IP protocol sets the rules for routing network packets in the network. The last layer that we will talk about is the transport layer. The two most well-known protocols in finance are TCP and UDP. These two protocols are very different. TCP works by establishing communication between two machines. All the messages that were sent first will arrive first. UDP doesn't have any mechanism to establish whether the network packets have been received by the network.

All the exchanges will choose their own protocol by using either TCP or UDP. In the next section, we will talk about the content that's sent through the network.