Nicholas Pratt
Nicholas Pratt

Skipping the middle man will you be joining the FX ECN party?

Nicholas Pratt explores why increasing numbers of both Retail and Institutional FX traders are being attracted to the transparency, speed, as well as trade execution and cost benefits of ECN trading platforms.

Electronic communications networks (ECNs) have been a prominent part of the foreign exchange market ever since electronic trading started to make an impression back towards the end of the Millennium when new entrants such as Currenex, Hotspot FX and the short-lived Matchbook FX emerged to challenge the market dominance of EBS and Reuters which had in turn developed as an alternative to the closed shop that was the inter bank FX market. The proposed benefits offered by ECNs have not changed in that time and were a combination of advancements in technology (particularly web-based tools) and the growing demand of buy-side firms to have greater access to the market. ECNs offered such access and the chance to be a price maker as well as a price taker along with less expensive execution and greater transparency. Since then the ECN model has continued to flourish in the FX world and the early forerunners such as Currenex and Hotspot have been joined by a host of new ventures targeting both the retail and...continued

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