e-FOREX April 2011

FOREX TECHNOLOGY

Leveraging fl exible Network Architectures for high speed FX

By Roger Aitken

In most walks of life excessive speed is dangerous and should be avoided. However, in the ultra-competitive world of high performance FX trading, speed is vital and can mean the difference between capturing a trading opportunity or missing the boat entirely. Anything that hinders the fastest possible execution of a trade can cost some fi rms their competitive advantage. With this in mind Roger Aitken explores how leveraging more fl exible network architectures can serve to aid those involved with high speed FX trading.

T

he need for high frequency trading (HFT) and less latency-sensitive players to be in as many fi nancial markets as possible, to receive and

process huge amounts of data and to communicate with as many counterparties as possible, means that many fi rms are facing an increasingly complex connectivity puzzle. Taking steps to put fl exible network architectures in place that can be scaled up on demand is one important way they can address many of the issues involved with this.

84 | april 2011 e-FOREX

For certain market participants the battle for ultra- low latency and for shaving further milliseconds when delivering orders into the matching engines of traditional exchanges and ECNs has focused attention on the importance of location and market access. And, with the recent growth in the number of high frequency and algorithmic FX trading fi rms operating all over the world, this situation is unlikely to get any easier to handle without harnessing the latest technology.

It’s all a long way from the days of trading fl oors when open outcry held sway in best bid and off er negotiations on stocks, bonds and futures and options.

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