Olof Paulson Head of E-TCM product development at SEB Merchant Bank
Olof Paulson Head of E-TCM product development at SEB Merchant Bank

Secondary FX flows – the evolution continues

Secondary FX flows – the evolution continues

First Published: e-Forex Magazine 16 / Features / October, 2004

Since the inception of online trading, sales and product development efforts have focused on providing efficient tools to support primary Foreign Exchange flows. This has meant concentrating on those corporate and institutional clients for whom FX dealing is their main business. While this bias is natural, given that this is where the bulk of the market’s volume is, secondary FX flows are increasingly coming into focus. And the e-adoption rate for secondary FX participants is faster than for the primary flows. This article examines some of the drivers behind this evolution and where it may be leading us.A definition of primary and secondary flowsClassification of flows is governed chiefly by the motivation behind the transactions. Secondary flow describes FX trading by clients where the need for FX itself is typically ancillary [or a consequence of] to their main business. If, however, the business lives or dies by the success of its FX trading, that is regarded as primary flow.Drivers behind secondary...continued

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