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demand for the ability to deliver ever more targeted and specific services and to do all of this at an ever increasing speed – is evidence that the battle for low latency is still alive and well in the world of machine readable news.


“When the use of machine readable news first started, the focus was very much on structured economic data, such as nonfarm payroll reports,” says Ryan Terpstra, the founder and chief executive of Selerity, a US-based provider of MRN services. “We saw an opportunity to expand on the content that was being used for MRN- based trading because it was no longer just for futures traders working off economic news,” he says.


One effect that has resulted from the increased use and sophistication of MRN in the FX markets is that some automated traders and market-makers no longer back


out of the market when an economic announcement is imminent, says Terpstra. “In the event of a central bank announcement, automated trading among the large banks that also operate as market-makers in the FX world have generally suspended liquidity until the outcome of the event was known. But now, the more sophisticated players are able to trade through the event because they are taking low-latency event data and adjusting their prices accordingly,” says Terpstra. “Tis creates more liquidity for traders and a new source of revenue for market-makers.”


Lower latency and greater accuracy have been the key developments, says Terpstra. Speed is critically important for banks wanting to make markets in FX in order to keep pace with those firms on the other


july 2012 e-FOREX | 107


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