This page contains a Flash digital edition of a book.
FOREX TECHNOLOGY


latency in FX – making the case for investing in new trading infrastructures


Reducing


The arms race in to deliver high-speed, automated trading requires a solid underlying technology architecture – but as Dan Barnes discovers, the multi-price, multi-market nature of FX makes this a complex task.


pairs dominating the market. For low-latency trading this presents a challenge. Regardless of a trading firm’s internal technical abilities, its speed of trading is largely determined by the infrastructure on which it trades. Without a core market, such as exchanges provide for groups of equity traders, a forex trader may have 50-60 connectivity routes to other firms, each with their own latency issues.


T Data centres


To reach a destination or counterparty as fast as possible, many firms have to consider which data


80 | july 2012 e-FOREX


he foreign exchange market is characterised by a heavy fragmentation of liquidity destinations, yet with only five or six currency


centres will provide them with the best access to other traders and which networks offer the fastest and most reliable links. To reach the bigger firms is simpler than reaching the smaller firms.


“We have found most of our customers desire to be in the three key regional cities in the US, UK and Japan which has become the de facto standard.” says Alan Schwartz, president of TNS’ Financial Services Division. “Te large financial players are all going to these regional centres, and their counterparties need connectivity into them. However, as not everybody is in one of these three locations, each trader has to take into account what the benefit of being there is. You do see people moving towards locating in the key data centres for the big players, while the smaller players use firms like TNS to get there.”


“Tat’s true for the main dealers but many of their customers are not centralized. Tis may be partly, because speed is not the focal point, or is just one factor in their overall FX trading strategy.” Te main dealers may have to concentrate together, but Schwartz observes that other smaller scale customers


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100  |  Page 101  |  Page 102  |  Page 103  |  Page 104  |  Page 105  |  Page 106  |  Page 107  |  Page 108  |  Page 109  |  Page 110  |  Page 111  |  Page 112  |  Page 113  |  Page 114  |  Page 115  |  Page 116  |  Page 117  |  Page 118  |  Page 119  |  Page 120  |  Page 121  |  Page 122  |  Page 123  |  Page 124  |  Page 125  |  Page 126  |  Page 127  |  Page 128  |  Page 129  |  Page 130  |  Page 131  |  Page 132  |  Page 133  |  Page 134  |  Page 135  |  Page 136  |  Page 137  |  Page 138  |  Page 139  |  Page 140  |  Page 141  |  Page 142  |  Page 143  |  Page 144  |  Page 145  |  Page 146  |  Page 147  |  Page 148  |  Page 149  |  Page 150  |  Page 151  |  Page 152  |  Page 153  |  Page 154  |  Page 155  |  Page 156  |  Page 157  |  Page 158  |  Page 159  |  Page 160  |  Page 161  |  Page 162  |  Page 163  |  Page 164  |  Page 165  |  Page 166  |  Page 167  |  Page 168