Anna Reitman
Anna Reitman

Execution Analytics - Helping FX trading firms to take more informed decisions

If best execution is the goal, then helping prove it is the mandate of TCA providers. And for FX markets, measuring execution performance is an activity that has yet to mature even as technology delivers more sophisticated tools. Anna Reitman investigates.

First Published: e-Forex Magazine 79 / Trading Operations / December, 2017

On one level, the concept of measuring costs and trade quality supposes that there is a robust access to data that is both homogenous and accurate, said James Singleton, Chairman and CEO of Cürex Group, an ECN (electronic communication network). But in a credit sponsored market like FX, measuring costs can vary firm to firm.  On another level, he states, the measurement of cost and trade quality is impacted by the very trading environment and methods chosen by a trader. The impact of last look on an order, for example, is hard to capture. Moreover, the continued use of voice orders, single dealer platforms or RFQs can create market impact before a trade is even executed, which is often ignored or not calculated at all.  “The accurate measurement of costs and execution quality will remain difficult as long as FX market participants stick with past practices,” Singleton says.    TCA provision itself has gone through an evolution. From price comparison across...continued

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