Nicholas Pratt
Nicholas Pratt

Multi-asset class trading: fuelling the development of FX Algorithms

Nicholas Pratt examines the growing importance of FX Algorithms to the multi-asset class trader and how important they are likely to become in multiple instrument trading strategies.

First Published: e-Forex Magazine 34 / Algorithmic FX Trading / January, 2009

2008 will inevitably be defined by the disastrous economic crisis that gathered pace in the first half of the year and then exploded messily across the global securities landscape in September. As a new year begins, the market has not really recovered. A thoroughly ursine sensibility has gripped investors and both hedge funds and traditional asset managers have watched assets plummet in value and returns diminish, withering on a precariously hanging vine.One consequence of these diminishing returns, aside from a mass of redundancies across the investment industry, is that those traders still with a job are increasingly turning to multi-asset class trading across all geographic regions in an effort to try and drag the maximum amount of value out of a dumbfounded market.FX Risk And as traders continue to combine asset classes and venture further into the emerging markets, they are invoking two key forms of FX risk. The first is a cash flow risk in that you have to pay for the asset on the purchase date, you...continued

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