Sitting on the foreign exchange spot desk at Deutsche Bank in London is a staff member whose primary task is detecting information leakage.
The information they are protecting is the desk’s pricing skews. Liquidity providers (LPs) give discounts on their bids or offers as a way of adjusting the risks they have on their books. This information is highly prized – it can signal an LP’s intentions and gives high-frequency traders (HFTs) an opportunity to trade ahead of them, resulting in worse
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