Brian Maccaba CEO and founder of Cognotec
Brian Maccaba CEO and founder of Cognotec

Real-time transactions, real life issues

Brian Maccaba looks at how banks are approaching the challenges and opportunities of price-distribution in a new foreign exchange trading environment.

First Published: e-Forex Magazine 18 / Features / April, 2005

The technical capability to stream executable prices to an unlimited number of clients via multiple channels has created a new set of challenges and opportunities for competitors in the foreign exchange markets. Last year, Martin Mallet, the Bank of England's chief dealer pointed out the increased risk for banks participating in multiple markets. This is because customers could, in theory, all access the same price at the same time creating great potential losses for the market making bank distributing the price, as can be seen in the examples opposite.These losses and opportunities can occur because of two relatively new factors which have emerged in the wake of wide-scale electronic trading. These are: • The massive scalability of the latest generation of e-commerce systems • The increased speed of pricing and execution hampering the bank's ability to respond to market fluctuationsTime and competitivenessExecutable prices mean that a transaction can now be completed in milli-seconds...continued

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