MFX Vector: Empowering the buy-side with state of the art technology

Investors today are confronted by a bewildering array of execution tools. While all undoubtedly have their place, the challenge lies in knowing what to use and when.Equally important is the justification of those execution decisions after the fact; to internal stakeholders, regulators and clients.

MFX Vector is the latest product offered by financial technology firm, MahiFX. Officially launched in May this year, it is one of the products offered in MahiFX’s e-FX Engine Room: a new concept in the e-FX space designed to provide a range of innovative products with full support and a fair pricing model. After almost eight years at Morgan Stanley, where he ran e-FX sales for Europe, Guy Hopkins has now joined the MahiFX team as Head of MFX Vector Sales.

MFX Vector provides a unique framework that allows buy-side clients to achieve two things: 

Firstly, its execution analytics allow users to identify their 
total cost of execution; including both explicit costs such as spread paid or earned, and implicit costs such as market impact or adverse selection. This applies equally to both risk transfer and algorithmic trades, and provides a key input to inform the decision-making process on the desk: helping traders to identify the appropriate trading strategy for a given order, based on past performance of similar trades. Of course, this also has numerous post-trade benefits including counterparty evaluation, third party algo comparison, responding to client queries and of course demonstrating Best Execution.

Secondly, the passive trading strategy provided by MFX Vector allows clients to benefit from MahiFX’s many years of market-making experience to earn spread on their orders and keep their execution costs to a minimum, thereby improving portfolio performance further. Clients retain full control over their orders at all times, applying a limit price or changing urgency settings for example. The MFX Vector dashboard provides full visibility over the algo as it places individual orders in the market, with fills being immediately stamped with real-time mark to market performance. Anonymous access means that information leakage is also minimised. 

MahiFX’s aim is to provide investors with tools that until now have really only been available to the top e-FX banks. As execution risk is increasingly being transferred from the sell-side to the buy-side, the importance of using the appropriate tools and techniques to manage that risk cannot be overstated.