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data centre where the executions are taking place. Schwartz observes, “Cross-connects are the closest in terms of proximity to the locations. From that you can go all the way back to being a typical extranet client of ours that could be in some far-off place, dealing with the issue of geographic location. Within a data center facility that houses a trading venue, we do offer cross- connects and also some specialized services like our managed gateway service where we manage and house equipment on behalf of our clients as some don’t have facilities of their own in a specific location. Our wide range of services reflects our desire to help customers of all sizes as some do not have the financial and technical resources to be in all the trading locations they wish to be.”
As the FX market is global, a firm could choose to be in a specific data centre to reach a venue, but if it needed to go to more than one venue, because there is not a centralised market, a trade-off has to be made as to where they are physically located and what their goal is.
The need for speed
One driver for low-latency trading has been the increasing use of algorithmic trading which allow
seem to be much more spread out, with a lighter density based within those centres, often reflecting the role of FX as being just part of their overall trading strategies.
“At a given time, customers tend to generally know which of the dealers they need to get to and that’s where the trade-off comes into play. Tey are usually quite aware of the venue’s location and their individual importance; however, they can’t entirely predict their future requirements.” says Schwartz. Customers will often target the venues and/or locations they believe are most important, however, management should be aware that additional locations may be required as they change strategies. TNS helps customers make their decisions based upon key data. For example, we can disclose network speeds, latency and costs. Tis helps guide their deployment decisions. We can offer online tools that provide latency information.”
Te lowest latency a firm can achieve is by being as close to the trading destination, whether a venue or a counterparty as possible. Tat can best be accomplished by cross-connecting two parties in a
Alan Schwartz
“We offer an enormous amount of flexibility; often services are customized, based on the customer’s needs ranging from simple to complex multi-location designs.”
july 2012 e-FOREX | 81
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