Automated market-making tested by intraday FX vol

- By Joe Parsons
- @Joe_Parsons416
- 18 Mar 2025

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The increase in sudden large movements in foreign exchange spot markets driven by President Donald Trump’s chaotic tariff announcements may be being amplified by market-maker pricing algorithms reacting to changes in intraday volatility and limiting how much risk they can take on, say some dealers.

As spot FX market flows have moved to electronic channels over the years, liquidity providers (LPs) increasingly rely on pricing algos to react to market news and set bid/offer spreads. An estimated 75

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