Peter Durkan CTO of Lucera Financial Infrastructures
Peter Durkan CTO of Lucera Financial Infrastructures

Optimizing access to FX liquidity pools

First Published: e-Forex Magazine 59 / Expert Opinion / January 2015

Why are so many FX trading firms, particularly liquidity takers, still struggling with their day to day Liquidity Management activities? This is, in our opinion, a combination of two trends that have been prevalent in FX: liquidity fragmentation and last look. The FX market is a highly decentralized asset in which dozens if not hundreds of market sources or venues are available for trading. The breath of connectivity and API compatibility required to build a well-informed and efficient liquidity pool is increasing and is often cost and resource prohibitive. Building, maintaining and managing this breath of connectivity is a daunting task. In addition, the prevalence of last look in trading means that liquidity takers need a robust set of pre-trade analytics to estimate the viability of a shown market. How important is it for an FX trading firm to get a better understanding of the best liquidity provider for a particular trade and how can they go about achieving this? The FX market is at an...continued

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