Joe Morgan
Joe Morgan

Carrier Hotels: where FX checks in for co-location services

The need for greater capacity and more efficiency of time to trade, otherwise known as latency, is becoming increasingly important for many FX market participants. Joe Morgan examines why growing numbers of globe-trotting FX trading firms are therefore checking in for co-location services, where specialist service providers’ host traders’ servers as close as possible to a trading platform’s matching engine.

Frank Reuter, director, global business development at BT Global Banking & Financial Markets in Frankfurt am Main, says FX market participants are now setting up trading hubs in major global financial centres such as New York and London, connecting to vendors, banks and brokers which provide services covering the full FX trade cycle.  These include market data aggregators such as Interactive Data and DealHub, the currency trading and price distribution software vendor, trade execution specialists such as 360T Trading Networks, the multi-asset trading platform along with major sell side firms such as Citi, Deutsche Bank and Goldman Sachs and Logicscope, the post-trade software vendor.  “To achieve the lowest possible latency from a connectivity point of view, you just can’t beat a cross-connect from your trading algorithm server to the matching engine of an execution venue. This works quite well when you want to connect to one venue only,” explains Reuter. “However, as...continued

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