Dan Barnes
Dan Barnes

Analytics, models and algorithms – pressure builds on FX Market Data platforms

Market data is the lifeblood of the FX trading community; and despite a fall in trading volumes last year, Dan Barnes investigates how trading automation could generate growth that would swamp existing data infrastructures.

First Published: e-Forex Magazine 51 / Features / April, 2013

The foreign exchange markets have not been sheltered from the bearish outlook of 2012; daily average market volumes fell year-on-year to US$4.3 trillion from US$4.7 trillion in 2011 according to research firm Celent. Nevertheless growth is predicted for 2013, driven by increased levels of high-frequency trading and the launch of new electronic trading venues. The higher speed of trading and potential for exponential growth based on HFT strategies is putting pressure on the ability of market participants to process market data.  “We’re seeing an increase in the number of market data sources, the firms participating in the markets, and as a result the sheer volume of quotes is increasing,” says Nick Deacon, senior director, EMEA at SAP. “We’re starting to see the knock-on effect of market data volumes increasing from various aggregators and sources. That means that firms have to beef up their infrastructures. What they are finding is that not only do they have to deal with...continued

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