Mark Suter
Mark Suter

What can we expect next in the electronic FX Option space?

Mark Suter, executive chairman and co-founder of Digital Vega, explores what ways the electronic FX option platform and product space is likely to evolve over the next few years and the factors and issues that will influence this.

The Foreign Exchange Option market has continued to lag behind the electronification of the cash markets by 5 to 7 years and now represents 25% to 30% of daily turnover. Development and adoption of dedicated option platforms has been slow for various reasons. FX options represent on average 5% to 7% of daily turnover and are regularly used by a much smaller subsection of the FX market. Traditionally seen as more complicated, the argument for making a significant long term investment into such a small and specialised business opportunity was less than compelling, even for larger, established service providers. It is therefore unsurprising that not many new entrants have managed to gain any kind of foothold. Major bank single dealer platforms have historically dominated the B2C space which they have jealously guarded from inception. This has meant that accessible liquidity has remained fragmented, cumbersome and ultimately expensive for the consumer to access. Access to market data has not improved and...continued

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