FEATURES
them services that they need from an infrastructure vendor markets its co-lo service as being in the very
same data centre as a particular venue’s matchingperspective.
engine that is being sought, it is actually there and
not forty miles away across a metro area.With FXall co-residing in a Savvis data centre, the
vendor is able to offer FX trading desks (sellside/
Another issue to consider is that since some FX venuesbuyside) space in their centre to connect in to the
can have two matching engine sites within a metro area,chosen venue, with connectivity to the FXall platform
it is important to be close to both (e.g. EBS in London)via a cross connect.
to ensure low latency performance, albeit that switching
between the engines in the case of EBS is infrequent.“What we can also do for these types of trading firms
(The i-Cross data centre was selected with proximity tois provide them with a service from a hardware
both matching engines in mind, ICAP told e-Forex).hosting perspective for their application and deliver
that as a service, on top of connectivity to other FX
That said, in post MiFID environment factors such asmarkets - or other asset classes - that they may wish to
cost and logistics may prohibit co-location at eachaccess,” Thomas says.
and every trading venue in Europe even if it was
offered, and therefore proximity hosting may be theFrom a client perspective, it cannot be emphasized
preferable option since it offers a point ofenough that the client should ensure that when the
equidistance between all target venues.
One only has to think about liquidity shifting
between venues (MTFs and incumbent exchanges) to
appreciate that co-locating at every exchange in the
purest could lead to wasted capital expenditure should
a particular venue fold or merge.
Competitive advantage
PH can give a competitive advantage to high
frequency FX trading boutiques looking to achieve
ultra low latency, especially given that current IT and
ultra-low latency developments are now outstripping
Moore’s Law, which observed that the transistor
density of integrated circuits doubles every two years.
Consequently, FX traders need to count on every
millisecond when trying to their fill orders - ahead of
the competition. Speed is money at the end of the day.
Lee Wade “Proximity puts you at the lead in terms of how
“At the end of the day,if traders were armed with perfect quickly you can get an order processed,” says Chris
information and knowledge,their business would gravitate to
Pickles, Head of Marketing - Financial Markets &those that have the fastest feeds.”
Wholesale Banking, BT Global Services. “But it also
|54 october 2009 e -FOREX
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