Traders Magazine
By Phil Weisberg, EVP Strategic Planning & Partnerships at oneZero
How liquidity is discussed in foreign exchange is shifting in response to the evolving structure of the market. As banks no longer hold large volumes on their books, the responsibility is completely on brokers to source adequate liquidity across the entirety of a market that sees $4 trillion per day.
It is a herculean task, one not helped by an ever-evolving thicket of global regulation and the complicated nature of FX infrastructure and trading.
The traditional way of looking at how to provide the necessary liquidity has been through the following: add a set number of connections between participants and then make additions when there is significant client demand. A third party can help, but it can also act as an information barrier that leads to an incomplete picture and a mischaracterization of overall liquidity.