Devexperts, a leading FX platform provider, has enhanced their FX Options platform to help more firms make the move from voice to electronic. e-Forex spoke to Devexperts VP of Trading Solutions Jon Light to find out more.
Why has it taken so long for FX Options to move onto electronic platforms?
Only around 40% of FX Options volume is estimated to be electronically traded, compared to 90% for Spot. When we talk about the electrification of the FX market, FX Options really are the long tail, mainly because they are complex and lower in ticket numbers. They are also rarely traded by themselves, often forming part of a broader strategy that needs to be represented together when trading and downstream for risk and regulatory requirements. This need brings more considerations for the user interface and backend systems. From pricing to calculating risk, different firms treat FX Options differently. There are many trader types, each with their own methods and processes; so, for now, a platform needs to cater to their specific needs. All of this means it’s been expensive to implement and support an electronic FX Options platform, until now.
What is now pushing more firms to implement an electronic FX Options offering?
As always, firms are looking to reduce both costs and risk; manual execution is expensive and prone to human error. Furthermore, clients now expect to interact electronically. Firms must adapt to their clients’ demands to execute not only vanilla options but multi-leg options and outright strategies on their platforms. We also see more requests for mobile applications, specifically around portfolio management and monitoring. Electronic FX Options trading presents significant opportunities for firms; as such, we see interest not only for brokers and dealers with existing FX Option businesses but from those looking to move into the space as well.
What does your FX Options platform consist of and why are firms choosing Devexperts?
Devexperts has experience delivering solutions across a broad spectrum of the FX Options marketplace. This includes everything from pricing engines for market makers and liquidity providers, to matching engines and complex web-based dealer platforms, to risk and wealth management portals. With FX Options, there is no one-size-fits-all solution that you can get off the shelf. Devexperts takes a modular approach. Using our extensive range of existing frameworks, we produce solutions tailored to our client’s needs.
Our FX Options offering covers:
- Design and build of web and mobile user interfaces
- FX Options pricing engine
- Trade matching and execution
- FIX connectivity for pricing and execution
- FX Options risk management
- Post-trade services for exercise & expiry, prime brokers and clearing houses.