Roger Aitken
Roger Aitken

Apprehending the culprits: overcoming the causes of 'end-to-end' latency in FX

The pursuit of ultra-low latency has become a bit of an arms race. And although throwing huge amounts of money at shaving off additional milliseconds and microseconds may not be important for all FX market participants, Roger Aitken discovers that rooting out and apprehending the causes of end-to-end latency remains a key goal for many trading firms.

The requirement for speed has for a long while been the mantra of the equities market fraternity as high frequency traders and arbitrageurs seek to attract any extra potential time advantage for the best possible execution and investment return. However, ultra-low latency seems set to prove equally tempting for many market participants in the FX market where, typically, latency is less of an issue for the majority of participants.  Equally, overcoming the causes of ‘end-to-end’ latency in execution and market data infrastructures will focus many minds in the FX market, although addressing one part of the latency chain without an holistic appreciation of the whole chain is likely to ultimately be a flawed approach. What is clear is that increasing numbers of FX traders are joining the high frequency trading (HFT) community who demand lower latency in their quest to improve fill ratios. In fact, according to New York based financial service firm, The Mankoff Company, high frequency...continued

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