Heather McLean freelance writer.
Heather McLean freelance writer.

Trading Latency – feeling the squeeze

Heather McLean interviews a variety of market participants to assess the impact of latency on their FX business activities.

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

Nick Barker“The bar of acceptable latency keeps getting lower.”Off market foreign exchange trades are the inherent problem of latency in this industry. This applies to both sides of the trading coin. Traders and trading systems lose out if the price opted for is so old the bank declares it obsolete and cancels the deal, and banks themselves lose out if latency in prices allows traders to take advantage of arbitrage opportunities. And here, latency be-tween the moment the button is pressed to select the price and the time it takes for that deal to complete may only be a matter of split seconds.As to what causes latency, the majority put it down to technology and the electronic hurdles. The fur-ther removed from the trade price originator the trader is, in terms of systems in the middle of the deal process or actual geography, the more latency is going to be involved.Nick Barker is executive director of e-commerce at UBS. He says latency is and has been an issue for UBS for some time. “The bar...continued

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