e-Forex Magazine January 2011

e-Forex Magazine January 2011

e-forex magazine. January 2011. Technology and Growth - key trends for e-FX for 2011. Overcoming systemic risk - FX adapts to a new OTC Clearing landscape. Regional e-FX perspective - increasing demand for online FX within Brazil. Cloud Computing Service

 

Overcoming systemic risk: FX adapts to a new competitive OTC clearing landscape

Leader

With clearing for credit default swaps and interest rate swaps already underway, Frances Maguire explores what factors will influence the likely providers of clearing services for FX OTC instruments....show more

 

Shifting demand for Single-Dealer Platforms

e-FX Industry Report

Sang Lee highlights a major shift occurring in market demand for single- dealer platforms driven by various customer segments’ need for asset class diversification and banks seeking to fully support the demands of their customers....show more

 

Derivatives, riding the next wave of regulation

Foreword

Markets remain more interesting than ever. With so many evolving issues and more often than not all happening simultaneously, it is hard to keep count and to follow each developments. Yet the landscape, in which we operate and from which we make a living is changing fast. And as Darwin’s saying goes, those most adaptable to change will survive (and thrive). ...show more

 

Technology and growth: key trends in e-FX for 2011

Marketplace

As a new year begins, thoughts inevitably turn to what the next 12 months will bring in terms of new developments, old practices, areas of growth and markets under threat. In this article Nicholas Pratt interviews some of the industry’s leading consultants to try and identify key focus areas that are likely to have a profound effect on the development of the electronic FX marketplace during 2011. Some of these address age-old issues that are common to every asset class, although with clearly different properties and stresses. Other developments are unique to the FX world and reflect the very distinct path that electronic foreign exchange is forging for itself....show more

 

Validation and Compliance: applying new toolsets for more effective TCA in FX

Features

Transaction Cost Analysis (TCA) has been embraced by the equities world for nearly twenty years, with the majority of buy-side trading firms expending considerable resources measuring just how well they executed on their share trades. Despite some reservations over whether TCA can evolve beyond a process useful in compliance and high-level performance assessment and into a tool capable of generating actionable and real-time analysis, few can ignore its benefits. While TCA has been fairly invasive across the equities space, demand for similar services is also picking up in the foreign exchange markets as many asset managers may have underestimated the impact of FX trade execution on investment returns, particularly with respect to secondary FX trades associated with underlying securities (equities, derivatives, etc.)...show more

 

Engaging the market with more intelligent FX orders

Features

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....show more

 

Single-dealer platforms: staying ahead in the FX game

Features

The electronic FX market started to develop back in 2000 with the launch of a number of multi-dealer trading platforms or portals that exploited the development of online and web technology to enable traders to see multiple prices on one screen and to execute on these prices electronically. At the same time as contributing to these multi-dealer portals, banks were also busy developing their own single dealer electronic platforms. Nicholas Pratt examines why the value proposition of these single-dealer platforms continues to strengthen for many trading firms and FX buy-side participants....show more

 

Regional e-FX perspective on Brazil

Regional eFX Perspective

On 22 September 2009, the credit rating agency Moody’s became the last of the big three rating agencies to grant Brazil the coveted investment-grade status, clearing the way for deep pocketed US and European institutional investors to look towards the country as a source for generating higher yield returns from investment portfolios. At the same time Brazil has also been seeing rapid growth and demand for FX e-commerce and e-trading services from a wide variety of traders, investors and cash management professionals. Heather McLean sets out to discover what factors are driving demand for e-FX in this Latin American powerhouse....show more

 

Reaching a crossroads: is it time to re-think the management of electronic FX options

FOCUS

The FX options market is the world’s largest and most liquid options market, and while a small fraction of contracts are traded on the exchanges, most of the FX options volume is traded in the OTC market. But with the regulatory spotlight on the OTC market, and the likelihood that clearing FX options through a central counterparty (CCP) will become a mandatory requirement for banks, Frances Maguire explores where we currently stand with the electronic trading of FX options and whether a rethink is needed about how they are traded and processed in the future. ...show more

 

High volume FX - taking a new approach to performance management

Forex Technology

Would you drive a Formula 1 car around a race track at 240 mph without any instrumentation? “Without instrumentation we can’t run a Formula 1 car at maximum speed. It is a highly tuned piece of engineering that needs monitoring on a real-time basis”. So says Andy Stevenson, Team Manager of Force India, the Formula 1 racing team based at Silverstone. The same can be said for modern low latency FX trading systems today. With the Formula 1 car, there is an entity that can be managed within its own closed environment, except for external factors such as the other cars on the track and the track itself. This is exactly the same for FX Businesses competing against other businesses with their own environments reliant upon exchanges and price data to drive the profitability of the business. ...show more

 

Cloud Computing Services: meeting more than demand spikes in FX

Forex Technology

Whilst it may still be early days in the evolution and adoption of Cloud Computing technology by financial services firms and other institutions, the hype surrounding it may in five years time have dissipated to such an extent that market participants and end users regard Cloud technology as the norm. Roger Aitken investigates how the Cloud Computing model operates and in what ways the pooled resources of an enterprise Cloud design can assist with the delivery of FX trading applications. ...show more

 

Strategic Insight: Outsourcing & Analytics for more efficient FX brokerage operations

Retail e-FX Provider

Heather McLean explores why FX brokers should consider outsourcing many of their back office functions and in what ways outsourced analytical procedures can be applied to a brokers risk, compliance and trading activities to facilitate more efficient business operations. ...show more

 

Solving the Post Trade puzzle: helping retail FX providers achieve increased operational efficiencies

Retail e-FX Provider

The retail FX business has always been a market that generated a fair amount of wariness among banks. Generally speaking no bank turns down a customer but retail customers are not always profitable prospects. This lack of profit does not result from a poor risk and reward equation or the too great a threat of default. Instead it is the result of poor operational economics and the cost of processing so many different customers for so little value. In this article Nicholas Pratt examines how new post trade FX processing solutions can help reduce some of the draw backs associated with delivering retail FX services and also assist providers to take advantage of new business opportunities. ...show more

e-Forex talks to Tom Higgins, CEO of Gold-i

Retail e-FX Provider

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Down to the cogs: getting to grips with trading methodologies in Managed FX

Retail e-FX Client

In today’s volatile world, Managed FX advisors utilize a variety of different approaches. However, the most successful methodologies seem to satisfy certain criteria. This article describes such criteria in detail and can serve as a good foundation in an investor’s search for an ideal advisor....show more

 

LMAX: bringing a neutral and transparent service to Retail FX

Retail e-FX Client

e-Forex talks to Robin Osmond, CEO of LMAX, the first Multilateral Trading Facility (MTF) for Retail Contracts for Difference (CFD) and FX trading...show more

 

SDX from SuperDerivatives – the weapon of choice in the FX e-trading arms race

Product Launch

FX options today still only represent between 4-7% of the USD 4 trillion daily notional in FX, however they typically generate more than 15% of banks’ profits, and this disproportionate contribution looks set to grow as the switch from voice to electronic trading continues. The prospect of central clearing for interbank FX derivatives trades has seen the industry devote a significant amount of resources – money, time and people – to developing technical and operational capacity to cope with an arms race in electronic trading. These investments are mandatory and a strategic necessity for banks that wish to retain a competitive advantage....show more

 

Product Review: Take your trading to another level with eToro

Retail Forex Client

e-Forex talks with Johnathan Assia, CEO of leading FX trading platform eToro...show more

AFX Capital Markets Bringing experience, passion and technology to online FX

Broker Study

e-Forex speaks with Stavros Lambouris, CEO of AFX Capital Markets ...show more

 

Coding, backtesting and strategy optimisation techniques for Automated FX

Traders Workshop

Modest barriers to entry have made automated trading more popular than ever, and the explosion of pre-packaged automated trading systems have particularly flourished through FX markets. What was once the playground of only the most sophisticated speculators is now accessible to anyone with an internet connection and a modest-sized trading account....show more

e-Forex Interview

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The boys are back in town

e-Forex Interview

Beta-Gamma Research is an algorithmically focused software house based in London with an office in Australia. The principal role of the company is to provide software solutions which enable banks and financial institutions to enhance their profitability, efficiency and risk management. Dr Paul C. Tolman, the founder, has a PhD in Mathematical Physics from Cambridge University and is former Head of Quantitative Trading at Royal Bank of Scotland Financial Markets. He is an expert in concurrent programming and applied Bayesian statistics. Paul’s uncle, Howard M. Tolman, is CEO at Beta-Gamma Research and has extensive experience in banking and in particular FX IT....show more

 

Fisycs Capital – taking emotion out of the trading process

Tradertalk

e-Forex talks with Alexandre Vigier and Arnaud Amsellem founding partners of Fisycs Capital, a systematic investment management firm based in Paris....show more

 

Venues, products and users: momentum builds for FX on Exchanges

FX on Exchanges

While there has been much focus on the regulatory pressure to push FX towards regulated exchanges to mitigate central counterparty risk and eradicate highly leveraged unprotected trading in the retail market, exchanges around the world are also benefiting from the natural evolution and growth of the FX market. The increasing size of that market, along with the development of different instruments and products to cater for its various segments, have both contributed to the evolution of trading FX on exchanges that were originally built around equities and interest rate derivatives. As demand for exchange-traded FX is set to grow Frances Maguire looks at the products and technology that the leading exchanges are developing to attract new FX business....show more

 

LiteForex Group in Nigeria

Sponsored Statement

The presentation from LiteForex group of companies which took place on 13 November 2010 in the city of Lagos, Nigeria, was a major success and aroused great interest among professional traders of the Forex market. There is no doubt that such success reflects credit on the organizer - International Forex Show Company LTD. A competent advertising campaign and information program which supported this event, received positive reports from the guests....show more

Create an FX ECN business with the unique White-Label Solution of a Swiss Bank

Sponsored Statement

As many businesses would probably agree, the first steps in implementing a new service or product are the most challenging to overcome. High start-up costs, shortage of technical resources, lack of professional back-up and support from a strong partner in the new domain are the most typical obstacles that become insurmountable for many otherwise promising ideas. Asset management or Forex-related companies are no exception...show more