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Thomson Reuters Corp (NYSE:TRI) seeks to further enhance the overall trading experience for its FX matching participants via the launch of a new randomization mechanism on its Spot matching venue.
The service is set to launch in production for an initial three pairs in June.
Randomization in electronic trading refers to deliberately adding delays to messages from market participants. The new mechanism further bolsters the fairness of its matching platform by mitigating speed as the primary determinant of execution. It introduces a delay of several milliseconds before processing orders, during which the mechanism groups similar orders into batches. Similar orders are defined as those with similar intents, including: hitting the bid, lifting the offer, and placing a bid or order at a specified price level.
The randomization mechanism is further differentiated in its ability to detect, distinguish and batch together only those orders that are competing with one another. This provides market participants who can respond within a minimum response time with an equal chance of being processed against the limit order book first.
Phil Weisberg, global head of FRC Trading at Thomson Reuters, says,
“By reducing the emphasis on speed as a determinant of success in trading activities, Thomson Reuters expects an enhanced matching venue experience for all market participants. The randomization mechanism further demonstrates Thomson Reuters commitment to facilitate fair and efficient trade execution and to provide the market with technology solutions that deliver an equitable trading experience for all participants.”
For the full announcement from Thomson Reuters, click here.