London 4pm Fix

The London 4pm fix is a daily benchmark exchange rate calculated from trading around 16:00 London time and widely used to value portfolios and settle index-related transactions. Because funds, index trackers and corporates need to transact at the published benchmark, hedging and rebalancing orders concentrate in that window, and both volume and volatility rise noticeably compared with the surrounding minutes. The rate is derived from actual trades and quotes observed during the fixing period rather than from a single quoted price. Traders watch the fix because spreads can widen and short-lived moves may extend and then unwind afterwards, particularly at month-end and quarter-end when rebalancing flows are larger.