e-Forex Magazine April 2009

e-Forex Magazine April 2009

Volatility's impact on e-FX -What's the Upside? Database integration - the next big challenge for FX risk management? FX Alpha strategy development - taking a new approach


Foreign Exchange and the Crisis


The foreign exchange market is arguably the most exciting market of all. Daily average turnover has increased by 210% during the period 2001and 2007 according to the latest BIS Annual Report. More importantly, Foreign Exchange has become a respected asset class in its own merits and given that it is typically non-correlated to other assets it provides good diversification. ...show more


Volatility’s impact on e-FX : What’s the Upside?


Market conditions have changed due to unprecedented volatility, and foreign exchange as an asset class, while continuing to grow, has been impacted nonetheless. With volatility breaking through normal trading ranges, FX market participants are adapting to a new paradigm as old models and assumptions can no longer be relied upon. ...show more


Electronic Foreign Exchange: Booming in crisis

e-FX Industry Report

In the midst of the global financial crisis, electronic foreign exchange experienced a boom in 2008, with overall e-forex trading volume surging 37%....show more


FX regulatory enforcement and financial market turmoil

Regulatory Roundup

In the last edition of e-Forex, Felix Shipkevich, General Counsel at CMS Forex, discussed the emergence of FX regulations, which in the first decade of their existence were primarily fuelled through intermittent regulatory enforcement efforts. Here he examines how the global financial market turmoil has further stimulated regulatory enforcement initiatives and continue to serve as a catalyst for additional regulatory oversight to prevent any further market destruction. ...show more


Institutional Investment in Foreign Exchange hedge funds


At Preqin, through our daily conversations with investors, we constantly monitor institutional appetite and demand for hedge funds. We currently track over 2,200 institutions active in the asset class on our subscription database “Hedge Fund Investor Profiles”. Of these, 15.2% have stated a preference for foreign exchange specific hedge funds, with even more investors considering the area through macro and multi-strategy holdings. We predict that this area will grow further in 2009 as investors move their capital out of under-performing strategies into more liquid and flexible hedge fund strategies. Over the first quarter of this year we conducted a survey on behalf of e-FOREX to find out more about institutional demand for FX hedge fund products and the likely growth of this industry in 2009. ...show more


Database Integration: The next big challenge for FX Risk Management


Over the past few years amidst a global financial crisis, Foreign Exchange trading has seen steady growth and experienced important structural changes. The institutions in FX markets have begun a serious review of the underlying technology infrastructure, and assessment of the capabilities required for competitive positioning in the next decade. ...show more


Optimising Options: new developments in currency derivative platforms


The recent volatility has put FX options trading firmly in the limelight. The technology to price and trade these instruments electronically is available, but whether the appetite is there for the automation of the more exotic structures remains to be seem. Frances Maguire investigates....show more


Sungard Sierra – a lesson in seamless connectivity


Seamless connectivity and STP are becoming increasingly important in the FX market. Stephen Yerkes, Director of ASP Services, Sierra, SunGard, explains what users should look for in a system that can meet these vital demands...show more


Deploying FX Algorithms for Systematic Liquidity Management

Algorithmic FX Trading

Systematic liquidity management uses technology to make banks' FX businesses more efficient, and ultimately more profitable. This is not confined to the top few global banks, but is equally beneficial to smaller regional banks. Most, if not all, market-makers should be reviewing their trading processes and should be seeking to reduce costs by implementing liquidity management solutions. This article examines: 1. The rationale behind why an increasing number of FX market-makers are implementing systematic liquidity management into their FX trading environmen 2. The likely problems. 3. The short and medium term gains. 4. The long term goals....show more


Regional development of Algorithmic FX trading

Algorithmic FX Trading

As the use and adoption of algorithmic FX trading strategies continues to develop in the major financial markets of London, New York and Tokyo, focus is now turning to the next tier of FX marketplaces such as Western Europe, Latin America, Scandinavia, Australia and Asia. Nicholas Pratt sets out to discover what correlation exists between global growth patterns of Algorithmic FX trading and the characteristics of individual regional markets around the world...show more


A new approach to FX Alpha strategy development


Back in the early 1970s, the foreign exchange (FX) market was a little-known world primarily relegated to currency traders inside central banks and government institutions. However over the past 40 years, FX trading has exploded into one of the largest asset classes globally with several trillion traded each day. From the introduction of online currency trading in 1994 to the arrival of the Euro in 2002, FX trading has come to attract some of the best financial talent around the globe – gaining attention from prominent hedge funds and commodities trading advisors (CTAs), as well as leading banks and financial institutions....show more


GAIN Capital – a tough act to follow

e-Forex Interview

e-Forex talks to Glenn Stevens, CEO of GAIN Capital, a global provider of online foreign exchange services....show more


Curing the Post-trade FX problem: Is it time for radical surgery?


In recent years, the FX market has witnessed the emergence of a new trend in electronic trading: algorithmic trading strategies designed to capture execution opportunities in increasingly automated and fragmented marketplace. This article examines the changing market reality in the FX market, assessing the potential for growth in adoption of FX algorithmic trading, as well as identifying possible pitfalls. ...show more


Build versus buy: post-trade choices facing FX trading venues


Despite the current budgetary constraints, the difficulties in improving post-trade processing for the spiralling number of FX tickets is still tempting the banks and FX trading venues to build rather than buy. Frances Maguire looks at the choices involved....show more


User-friendly technology - Key to overcoming barriers in Retail FX

Retail Forex Client

With the world’s financial markets still engulfed in the global economic crisis, the appeal of the forex market has never been greater. In addition to the major advantages of 24 hour activity and virtually limitless liquidity, forex is a market that continues to provide significant speculation opportunities while other markets are struggling to maintain stability. These advantages are apparent and thus raise the question: why aren’t more people trading forex?...show more


Designing automated FX trading strategies for Managed Accounts

Retail Forex Client

Automated processes in the financial field have for a while been the subject of deep interest and evolution, especially since the breakthrough in several areas of computer science in the 90s. Applied to the investment management process, such interest has been leading to a quest of even more integration of the financial decision-making events chain, and such integration finds its ultimate expression and purpose with the so-called automated strategy....show more

Regional Study: Arab Financial Brokers, Kuwait

Retail Forex Client

The Islamic world, and especially the Middle East, is fast emerging as a growth area for foreign exchange trading. Arab Financial Brokers (AFB) appears poised to take advantage of this growth. e-Forex interviewed Abdullah Abbas, General Manager of AFB in Kuwait City about some of the exciting opportunities in the region and the wide variety of services which AFB offers....show more

Case Study: MetaTrader 4 to ECN: The next leap

Retail Forex Client

In some markets, the technology of user interfaces and execution move forward together. In the case of the Forex market however, the evolution of the market has separated the most popular client software solution from the evolving execution process of the industry. While one side of the equation has moved forward, the other side has not been fully integrated with those leaps, until now. The MB Trading/3DForex Forex ECN integration with MetaTrader 4 (MT4) represents a key milestone in the Forex world....show more


With Frederic Bettan, Managing Partner & CEO at Swing Capital.


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Delivering Institutional grade products and services: Are banks raising the bar in Retail FX?


With Paul Inkster, Head of Product at Barclays Stockbrokers, Sanjay Madgavkar, Global Head of Retail FX trading at Citi and Betsy Waters, Global Head of dbFX at Deutsche Bank....show more

Site Inspection with Squared Financial

Retail Forex Client

Squared Financial Services Limited is based in Dublin, and is fully-regulated by the Financial Regulator in Ireland. Its execution platform provides round the clock ECN style (variable spread) competitive access to major banks, including Bank of America, Citi, Deutsche Bank, Goldman Sachs, RBS and UBS. Since these currently constitute many of the major liquidity providers in the FX marketplace, the advantage is clear: Clients are not dependent on any one bank or broker for prices. Prices are fed straight through from these banks with no mark up and a standard, competitive sliding scale volume-based commission fee structure is applied to turnover....show more