A placement group is a logical grouping of instances within a single Availability Zone. Usingplacement groups enables applications to participate in a low-latency, 10 Gbps network.
Placement groups are recommended for applications that benefit from low network latency, highnetwork throughput, or both. To provide the lowest latency, and the highest packet-per-secondnetwork performance for your placement group, choose an instance type that supports enhancednetworking.
Placement groups have the following limitations:
The name you specify for a placement group a name must be unique within your AWS account.A placement group can't span multiple Availability Zones.
Although launching multiple instance types into a placement group is possible, this reduces thelikelihood that the required capacity will be available for your launch to succeed. We recommendusing the same instance type for all instances in a placement group.
You can't merge placement groups. Instead, you must terminate the instances in one placementgroup, and then relaunch those instances into the other placement group. A placement group can span peered VPCs; however, you will not get full-bisection bandwidth between instances in peeredVPCs. For more information about VPC peering connections, see VPC Peering in the Amazon VPCUser Guide.
You can't move an existing instance into a placement group. You can create an AMI from yourexisting instance, and then launch a new instance from the AMI into a placement group.
Reference:
http://docs.aws.amazon.com/AWSEC2/latest/UserGuide/placement-groups.html