e-FX and Latency

Data Latency "Why Speed is of the Essence" Sean O'Donnell looks at how the increased move by the FX markets to a real-time trading environment means that there is a new urgency to address the risks associated with data latency amongst the bank participants.

First Published: e-Forex Magazine 21 / FOCUS / October, 2005

By Sean O’Donnell, RealStream Product Director at CognotecThe increased move by the Forex markets to a real-time trading environment means that there is a new urgency to address the risks associated with data latency amongst the bank participants. Fortunately, new technical solutions exist enabling the problem to be effectively addressed.Data latency has become a critical issue for the banking industry. The evolution of electronic trading is seeing Executable Streaming Rates increasingly replace Re-quest For Quote (RFQ) transaction models. Executable Streaming Rates (ESR) en-able clients to deal with a single click on live rates which are updated in real-time, rather than requesting to deal on a rate which was made ‘good’ for a period of time and may be old.The shift is from a trading environment in which rate data reflects an historical posi-tion (albeit one which is just one or two seconds old), to one where rate data reflects current positions.For market-making banks serious about...continued

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