While attempts have been made to trade FXO on an ECN type platform, for now anyway, the traditional RFQ model has prevailed and non-disruptive technology is the order of the day. Part of the Dodd-Frank requirements is the necessity of an order book, and so the baseline is there to, in time, develop exchange type electronic trading with Central Limit Order Books. The question remains when and where will the volumes come electronically and who is best positioned to attract these flows.
Enter 360T, who has traded FX options electronically for quite some time, has both an order book (as mandated by Dodd-Frank) and an RFQ system, a partnership with FENICS to provide pre-trade market analysis, trading and STP to FENICS Professional. 360T currently has over 25 market makers in FX options, many of whom quote automatically. Interestingly, 360T Group is the leading independent global provider of multi-bank, multi-asset trading platforms. Since its inception in 2000, the company has developed and maintained a state of the art portal for FX, cash and money market products and FX/interest rate derivatives. Its best of breed technology enables clients to trade with greater transparency and control at every stage of the trading lifecycle. And they are now clearly demonstrating their commitment to FX options not only with full SEF compliance, but also with the appointment of Glenn Rosenberg as their Global lead for the product.
Rosenberg brings a great deal of product knowledge and experience to 360T. His Bridgetrade technology platform fully automated the entire workflow process for FXO. At 360T, he’ll be responsible for increasing the growing option trading activity as well as all new product and business development. There will be an emphasis to develop new technology and functionality to attract new customer segments and to generally give the market place more possibilities.
The framework for 360T’s option technology is its TEX platform. TEX offers the ability to RFQ more than 25 market making banks. Some of its products include vanilla options, risk reversals, straddles and any 2-leg combinations. 360T is also adding to their current list of market maker banks that will auto quote options on the system. With their FENICS partnership, and the FENICS ePricer analytics tool, traders can now manage all their pre-trade analysis within the TEX application, and in the same window, submit their RFQ.
This greatly streamlines the workflow from multiple windows and clicks into one window. FENICS ePricer provides price discovery on a wide range of options using their Volatility Surfaces. As part of this partnership, FENICS Professional users have full back end STP through the FENICS Gateway. Any trade done on 360T - options, spot, forwards, swaps - will be sent directly to the trader’s portfolio. This feature enables in a single environment to manage all FX needs, including any hedging and rebalancing of an options portfolio.
While perhaps better known in Europe, 360T is making a big push globally, including the US. They not only have over 800 corporations trading on their platform, but also over 400 banks. This client base will help 360T lead the way in the growth of FX options electronic trading, offering direct access to a major source of liquidity as these clients have a natural tendency to trade options. As they become more involved in options, electronic price discovery will grow exponentially. Factor in the order book technology designed by 360T, with the ability to post orders, sort and rank with known market logic and match up bids and offers, and it’s easy to see the future taking place already.
Roadmap for growth
360T has no intention of becoming complacent. With options now centralized under Rosenberg, the full time stewardship for product and business development demonstrates a clear commitment to the growth of this product and will offer clients many opportunities in the future. Part of the road map will include the development of 2nd generation options, more complete utilization of the order book, continued on boarding of market makers to quote automatically and enhancing general awareness and understanding of the brand and all its capabilities.
While so many of 360T’s competitors are focused solely on the FX space, 360T’s current abilities in the MM and IRS space give it the technological and business advantage of being able to easily scale into new products and asset classes. The firm’s agile and flexible culture provides a natural environment for entrepreneurialism and growth.