Matching for the buy-side – considering the merits

Few clients will find that a matching engine answers all their needs, but for spot FX trading it’s the most efficient way to trade says David Ogg. He outlines what matching engines are capable of and their benefits.

First Published: e-Forex Magazine 10 / Features / April, 2003

"The largest room in the world is the room for improvement." So said an unknown Greek philosopher as he unknowingly described the current e-FX client experience. Providers of technology and eFX-solutions to clients will recognize that it is indeed a “large room” that FX clients find themselves forced to trade from.FX clients have historically not had the electronic market access capabilities that they have in equities or other financial products. Does a matching product deliver the needed results and make that aforementioned “room” smaller? And if so, how would it work and what are the advantages associated with a matching engine?Matching engines allow clients to trade on truly live prices instantaneously, while at the same time allowing them to “earn a spread” by placing their own bids and offers into the marketplace. Clients of matching engines can also benefit from Straight-Through-Processing “STP” via API’s that can not only allow clients to process...continued