Peter D'Amario
Peter D'Amario

The tide has turned: Shifting attitudes towards eFX

Peter D'Amario examines why FX users who have spurned e-trading in the past decide to give electronic trading a try — or are pressured to do so.

First Published: e-Forex Magazine 29 / Leader / October, 2007

Electronic foreign exchange trading volumes are expected to rise for at least the next several years as the market’s biggest customers direct more of their total forex business to electronic systems and FX users who have spurned e-trading in the past decide to give electronic trading a try — or are pressured to do so. Annual electronic FX trading volumes more than doubled from 2004-2005 to 2005-2006. From Q4 2005 to Q4 2006 electronic systems captured roughly half of all foreign exchange trading volumes, up from just 30% the prior year. Among the approximately 1,700 buy-side foreign exchange users participating in an annual FX study conducted by my firm, Greenwich Associates, e-trading systems attracted more than $35 trillion in trading volume during the 2005-2006 period. Sources of growth The strong and consistent growth in e-trading volumes has come from three main sources: 1. The foreign exchange market overall has been expanding at explosive rates, carrying the electronic...continued

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