Nicholas Pratt
Nicholas Pratt

Gaining competitive advantage with FX Aggregation services

If what you see is truly what you get then it is little surprise that traders are investing heavily in FX aggregation. But, says Nicholas Pratt, with such a wide variety of products on offer, how do traders pick the most appropriate solution?

In the old days an average FX dealer would receive prices from, says, six banks and three ECNs. These prices would be delivered through separate lines and represented on different screens. In recent years, after a successful debut in the equity markets, a number of vendors have entered the FX market offering to take firms’ separate feeds, replicate them and give them a single, consolidated front-end tool where they can view all of their prices on one single screen and hence aggregation was born.Although the concept is a simple one, the behind-the-scenes work done by vendors in terms of connecting to each and every venue and normalising all the data is incredibly taxing both in time and resources. However, the competition betweenthe different providers of aggregation services is such that the end customer has been relatively shielded from the cost of the background work. And over time the simple concept has developed – the FX dealer can set up rules for executing on these aggregated prices so that...continued

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