Why UltraFX VPS and our dedicated servers are in the best location for currency trading?

The foreign exchange market is actually a two level market. The top level is the interbank market and the second level is the non‐interbank FX market. Major banks and market maker firms provide quotes for the non‐interbank FX markets. They have an order book, which will go net long or short during the execution of the non‐interbank FX orders. Every liquidity provider has a predetermined level for the maximum size of this net long or short position in each currency pair. When this level is reached, the liquidity provider will reduce the long or short exposure by buying or selling on the interbank market. This buying or selling still mainly occurs on the ICAP EBS or on the Reuters dealing system. If liquidity providers filling and taking retail orders into their books, which are worse than the actual prices of ICAP EBS and Reuters dealing systems than they will suffer unwanted losses. Therefore prices at these two venues act as a reference price for the liquidity providers. ICAP EBS has matching engines in different cities but only London is the only place where the matching engines for both ICAP EBS and Reuters dealing systems can be found. Because of this, London is a unique place regarding forex execution. To receive prices from these venues with the least delay possible, is a crucial element in liquidity provision for the non‐interbank FX market. Here, the importance of colocation comes into play because the closer the liquidity providers are to these two venues, the faster they will receive the reference prices. Non‐interbank forex traders also need to be closer to these venues because most likely, they will see better executable prices coming from the liquidity providers. The Equinix LD4 data center is the best place in this regard and most liquidity providers send quotes to the non‐interbank European venues from there. It is often said ‘everybody who counts in FX business has a presence here”… It’s no accident therefore that UltraFX VPS and UltraFX Dedicated Servers are located in London (UK), in the Equinix LD4 data center.