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FOREIGN EXCHANGE

FX comment: CME maths doesn’t add up

CME Group clearly has no problem shamelessly pushing their products on the back of their third annual global FX market survey, but perhaps they should take some mathematics lessons first.

According to the survey, CME says that “concerns about latency saw a 13% increase, up from 16% to 29%.”

This reporter was about to commit the numbers to paper when a colleague pointed out that the increase from 16% to 29% is not 13%. It is 13 percentage points, or an 81.25% increase. So the number of people concerned about latency is rising a little faster than the CME would suggest.

Seeing that this reporter spent most of her high-school career under a Labour government, she had an excuse not to know the difference.

Certainly if I was going to trust CME Group – “the world’s largest and most diverse derivatives exchange” – with my money, which is what Derek Sammann, managing director of financial products, is presumably hoping, it’s not unreasonable to expect them to know their percentages before all the fancy stuff.

“By offering liquidity, transparency and credit risk mitigation, we provide investors with the solutions they need to manage their risk on exchange. In addition, we plan to offer a post-execution clearing service for over-the-counter FX trades through CME ClearPort, giving market participants increased security, efficiency and flexibility,” he said.