e-FX Awards 2020: Best liquidity aggregator/connectivity service – Avelacom

Connectivity and IT infrastructure provider Avelacom strives to optimise low-latency connectivity between trading hubs to match the leaps made by electronic trading in FX markets in the first half of 2020

The hold of electronic trading substantially tightened in FX markets in the first half of 2020 as market participants shifted en masse from voice trading due to traders being compelled to work remotely as much of the world went into lockdown during the Covid‑19 pandemic. 

“For those firms that commonly traded by voice, adapting to the pandemic was a big challenge,” says Vincent Harrison, managing director of connectivity and IT infrastructure provider Avelacom. “Electronic trading can be done more easily on a remote basis than voice trading and is therefore more adapted to the current trading environment.”

Voted best liquidity aggregator/connectivity service provider at the 2020 FX Markets e-FX Awards, Avelacom expects this shift towards electronic trading to continue as more firms adapt their trading practices to remote working styles. 

This shift towards more e-trading reinforces the ever growing need for low-latency connectivity solutions between the world’s major FX hubs, a situation which plays well in the hands for Avelacom and its worldwide connectivity network.

To become the connectivity supplier of choice to the trading community, the firm has built a one-stop-shop network of more than 80 points of presence around the world that caters to a variety of trading strategies, asset classes and latency requirements.

“Obviously, New York, London and Tokyo remain very popular and it is our responsibility to not only keep this route in the best shape but to always try to provide market participants with the best latency numbers between these three cities,” Harrison points out.

He explains that the firm continuously strives to optimise latencies between the main trading hubs. This year alone Avelacom reduced round-trip latency times between London’s LD4 to Tokyo’s TY3, a gain of more than six milliseconds on this route.

The London to Singapore route has also gained traction in recent months as an increasing number of FX market makers are setting up pricing engines in the Asian city-state. Consequently, Avelacom was able to shave off 1.6ms from the round-trip times between the two cities in the past year by pushing latency down to 147.4ms.

But as latency improves between the top FX trading hubs, competition in these centres increases as well. Due to this increased competition in the largest trading centres Avelacom has seen robust demand for connectivity to the less trodden destinations in emerging markets such as the Middle East, Asia‑Pacific, Latin America and South Africa.

“There is a growing trend of market participants exploring new markets and understanding where new opportunities can be had on a global scale,” explains Harrison. “And, as we expect these destinations to grow in popularity in the future we are working hard to provide the required infrastructure for those clients who want to try new markets and take advantage of the volatility and price movements they offer.”

To this end, the firm has improved latency times to popular emerging market trading centres such as Istanbul by reducing round-trip times from London to 38.4ms from 40.66ms or to Johannesburg to 154.4ms from 155.8ms.

For investment banks and trading firms wishing to trade Moscow Exchange products without the need to co-locate in a data centre in Moscow Avelacom set up points of presence in London, Frankfurt, Chicago, Singapore, Hong Kong, Shanghai, Dubai and Mumbai for the Russian exchange. 

“Trading firms can connect to Moscow Exchange via the most commonly used data centres in an easy and convenient manner,” Harrison says. “It’s a very cost-effective and low-latency solution, without the need to build extra infrastructure.” 

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