William Essex
William Essex

Liquidity, price and timing - engineering more client centric FX algorithms

Foreign exchange may be almost as old as commerce itself, dating back to the days when commodities were sold off the backs of camels, but widely accessible FX-dedicated execution algorithms are a surprisingly recent innovation. As William Essex discovers they go back just five years.

First Published: e-Forex Magazine 49 / Algorithmic FX Trading / October, 2012

In August 2007, Credit Suisse Advanced Execution Services (AES) offered its FX algorithms to external clients. The move was as much a show of prescience as of good timing: the stated intention of the offer was to enable clients more effectively to locate global liquidity; as we all know, Summer 2007 was when global liquidity first went into hiding. Credit Suisse’s first-mover advantage lasted only months, with Goldman Sachs for example announcing its own plans for the FX-algo space before end-2007. Global trade, global finance and indeed global liquidity have continued to develop in interesting ways, and execution algorithms have now become an established “tool in the toolbox” for FX-market participants. Asif Razaq, global head of FX algo execution at BNP Paribas, observes that: “Over the last couple of years, we have seen an increased level of interest from our clients in using FX algorithms as an alternative to traditional methods of trading. The way I would describe such an...continued

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