Technology: opening up exchange listed FX products to new breeds of trader

Frances Maguire looks at whether the exchanges are succeeding in attracting both retail investors and quant funds to trade FX on-exchange.

First Published: e-Forex Magazine 31 / FOCUS / April, 2008

In the absence of a centralised marketplace for the FX market, the derivatives exchanges have long since set their sights on attracting FX business and are designing products accordingly. The natural fit of FX trading alongside equity and fixed income derivatives means that they are gaining business from both new and existing players, further helped by the fact that, on the retail side, FX options can traded through the same brokerage account as stock options. David Schulz, director, Foreign Exchange Products, at CME Group says the exchange’s FX products began trading electronically in April 2001 and have become a must have pool of liquidity averaging nearly $110 billion notional daily in the first half of March.  “We are constantly striving to add new market participants with algorithmic trading models streaming prices into the CME Globex® platform. We are constantly improving the speed of execution times, currently about 12 milliseconds per transaction. The cost of trading has...continued

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