How to navigate the fragmented liquidity of NDF – FX markets

Liquidity consumers need to embrace dialogue with their LPs as an integral part of the liquidity process, HSBC executives say

A fragmented market

The fragmentation of non-deliverable forward liquidity (NDF) has created an opportunity for trading departments to optimize the liquidity stocks they face. The rise of last-look liquidity across a number of electronic communications networks (ECNs) has created the illusion of deep liquidity, but the reality is that providing liquidity involves verifying a trade through last-look, which in turn creates the illusion of liquidity. Improved fragmentation reduced the minimum propagation gain in NDF

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