As Machine Readable News gains further traction in FX, Nicholas Pratt examines the reasons for its growing use and how the providers are extending their offerings.
Dan Barnes discovers why delivering effective low-latency for FX trading requires a tailored technology stack.
As increased adoption of algorithmic and high-speed trading strategies continue to turbo-charge the FX landscape, Dan Barnes explores how FX trading has become very time and latency sensitive, multiplying the challenge of tracking market activity and the cost of doing business.
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.
Complex Event Processing (CEP) technology is continuing to expand further out across and beyond capital markets and banking sectors - including at FX retail and institutional levels. Top use cases from just a few years ago - headed by algo trading - have been leapfrogged lately by auto hedging and risk, market surveillance and FX e-commerce. Roger Aitken examines the landscape.
With cloud computing services continuing to have a dramatic impact on the delivery of FX trading applications, Joe Morgan looks at where we can expect to see further significant use of the technology being applied to post trade and FX risk management operations.
Joe Morgan discovers more about how managed network connectivity solutions can significantly improve the delivery of FX market data between FX trading venues, counterparties and data centers and what tools and applications are now available via managed network providers to help High Frequency FX trading firms analyse their pricing, trading and post-trade data processing activities.
Joe Morgan examines how a new generation of middleware messaging architectures can now be leveraged to help platform developers overcome many of the difficulties in moving real-time FX data across multiple delivery channels.
The need for greater capacity and more efficiency of time to trade, otherwise known as latency, is becoming increasingly important for many FX market participants. Joe Morgan examines why growing numbers of globe-trotting FX trading firms are therefore checking in for co-location services, where specialist service providers host traders servers as close as possible to a trading platforms matching engine.
As the firestorms engulfing financial markets continue to captivate participants and observers alike, the activities of managed network service providers remain, appropriately, largely in the dark. The work of companies specialising in network infrastructure beneath the ground and sea is not likely to make the headlines in the financial or popular press at the moment. But, as Joe Morgan reports in this article, these businesses are at the nexus of the forces driving the development of an increasingly interconnected global financial system, driven in part by the growth of high-speed trading. The fibre optic cabling which links trading hubs together is of vital importance in FX, a global market where traders follow the rising sun to trade on different venues throughout the day.
Cloud computing services are widening access to the FX market and helping firms to better integrate front, middle and back-office functions. Joe Morgan examines in what ways use of cloud computing can improve the operational capabilities of trading desks and allow FX firms to fine tune their offering.
Complex Event Processing (CEP) technology continues to fan out further and faster across the FX market moving beyond the algorithmic trading arena into new areas. Roger Aitken examines the landscape and canvasses some leading vendors.
When it comes to improving real-time response rates in the FX trading world a number of factors come into play in terms of the whole technology stack - from messaging and front-end technologies for data distribution to execution latency and the network layer. Handling one aspect at the expense of another rather than addressing matters holistically is flawed and ultimately could prove costly. Roger Aitken reports.
Roger Aitken explores the continued drive by FX trading houses to secure low latency trading solutions and discovers how financial network community ecosystems, built around co-location, proximity hosting and managed service offerings, play a pivotal role in allowing trading participants to remain efficient, secure and generate profitable returns, amid rapidly burgeoning daily FX trading volumes.
With FX transaction volumes and associated data rates seemingly spiralling, the issues facing large, medium and small sized trading firms in the FX space would appear undiminished. Handling and exploiting the situation fundamentally requires a critical evaluation of systems, IT architectures and budgets. Roger Aitken canvasses industry opinion on how technology is helping to unlock the power of FX market data.
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 firms their competitive advantage. With this in mind Roger Aitken explores how leveraging more flexible network architectures can serve to aid those involved with high speed FX trading.
Whilst it may still be early days in the evolution and adoption of Cloud Computing technology by financial services firms and other institutions, the hype surrounding it may in five years time have dissipated to such an extent that market participants and end users regard Cloud technology as the norm. Roger Aitken investigates how the Cloud Computing model operates and in what ways the pooled resources of an enterprise Cloud design can assist with the delivery of FX trading applications.
Would you drive a Formula 1 car around a race track at 240 mph without any instrumentation? Without instrumentation we cant run a Formula 1 car at maximum speed. It is a highly tuned piece of engineering that needs monitoring on a real-time basis. So says Andy Stevenson, Team Manager of Force India, the Formula 1 racing team based at Silverstone. The same can be said for modern low latency FX trading systems today. With the Formula 1 car, there is an entity that can be managed within its own closed environment, except for external factors such as the other cars on the track and the track itself. This is exactly the same for FX Businesses competing against other businesses with their own environments reliant upon exchanges and price data to drive the profitability of the business.
FX market volatility has been declining since late 2008 when currencies witnessed some of their biggest single-day moves ever. But everyone is acutely aware of how quickly volatility can return. With FX trading volume now exceeding $4 trillion daily (BIS 2010 Survey) and the reality that Tier One banks such as Lehman Brothers can disappear overnight, the stakes have never been higher for FX traders. Accurately measuring and understanding your FX exposure has therefore taken on ever greater importance.
Pressures within the fragmented FX marketplace are leading increasing numbers of buy and sell-side firms to review, replace and augment their sources of liquidity. Given that so many firms rely on third party aggregation service platforms to provide this liquidity, how are the developers of these aggregation platforms adjusting to these pressures? How are FX aggregation services being customised and tailored to reflect the individual trading strategies and requirements of an increasingly demanding customer base? And how are these same service providers managing to solve the connectivity and compatibility issues that have hindered the provision of aggregation services in the FX market for so many years while at the same time insulating their clients from the cost involved?
The pursuit of ultra-low latency has become a bit of an arms race. And although throwing huge amounts of money at shaving off additional milliseconds and microseconds may not be important for all FX market participants, Roger Aitken discovers that rooting out and apprehending the causes of end-to-end latency remains a key goal for many trading firms.
It seems as if every few months there is an article or panel discussion that appropriates a new catchphrase to sum up our industrys current fixation with the latest technology. These colloquialisms form the vernacular to communicate complex issues. Vendors adopt the insider talk to market and promote services to clients based on their technological acumen. For many of these clients, however, the essential details underlying their technical jargon may not be obvious or even available.
With Complex Event Processing (CEP) having spread out across the asset classes - initially within equities there has now been a remarkably fast uptake within the FX space for CEP technology among both buy and sell-side firms. Roger Aitken quizzes leading CEP vendors and experts on the second generation landscape and where the future lies.
Rate feeds are an essential part of the FX trading process and like every other process it is something that is continually subject to re-engineering and investment in technology development. This development has increased manifold since the advent in electronic and algorithmic trading and it in turn has created a burgeoning vendor market for various software products and applications designed to help banks, brokers and traders make use of rate feeds that can blended, aggregated and optimised to produce an accurate, spike-free supply of prices that reflects true market prices.
Roger Aitken explores why FX trading firms are increasingly seeking dedicated connectivity to their FX trading venues and counterparties and what are the benefits of using global Financial Extranets to achieve this.