Avoiding market impact – it takes two
Dealer hedging practices have a big part to play in quiet execution, but so does client behaviour, writes UBS's Ciara Quinlan
Electronic foreign exchange markets have undergone an extensive transformation over the past decade, raising many questions about what are the most efficient trading practices and technology. Throughout this transformation, the job of trading spot FX has become increasingly complex as the market has fragmented. Participants can choose from a large number of liquidity providers (LPs), which they can connect to directly or via one of the many multi-dealer venues.
The majority of market
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