Engaging the market with more intelligent FX orders

Order management has become an important area of focus for buy-side firms and, consequently, an area that any bank offering an FX trading platform is keen to develop. Nicholas Pratt examines the many ways that the buy-side can work their orders to improve the way they engage with the FX marketplace and how their needs may differ between different client segments – from the more casually trading corporates simply looking to hedge an exposure to the high frequency and high intensity FX traders looking to generate alpha.

The availability of order management algorithms has been hugely beneficial to buy-side firms in enabling them to minimise market impact and to achieve better execution results. And banks have been investing significantly to ensure that their     e-commerce platforms can meet the new demands of the buy-side for more sophisticated order management and to keep pace with the accelerated evolution of the electronic FX marketplace.  Engaging the marketplace There are essentially two ways for buy-side firms to electronically engage the marketplace, says Yaacov Heidingsfeld, founder and chief executive of US-based TraderTools which provides trading services to sell-side banks in the FX market. They could decide that they want to show a complete order to a particular vendor or they could decide that they would prefer to work that order within their own technology and only send it for execution once specific execution conditions have been met. “If you have a sophisticated order management...continued

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