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FX liquidity in the Americas (a BIS study) – worth a read

Always interesting to read the Bank of International Settlements (BIS) studies, this 61 page report on FX Liquidity in the Americas being no exception.

The report looks at the impact of technology, regulation and market structure on the availability and cost of FX liquidity and comes to the following conclusions:

1. No single FX liquidity metric gives complete picture, but in combination, several metrics can provide insight into the state of market liquidity (see tables below)

TradAir Comment: That’s an interesting observation, and something that at TradAir we understand, which is why our trading analytics service highlight multiple metrics that enable price takers to understand, analyse and optimize their available liquidity. Bid-Ask spread and spread ranking, are only part of the story, but understanding a liquidity providers (LPs) last look hold time, their rejection ratios (by currency pair and trade size) and cost of that rejection on covering residual balances and market impact when hitting a LP (are they able to internalise your flows), provides greater insight into the quality of available liquidity (see previous blog post “Understanding the quality of FX liquidity provision”).

FX Liquidity Metrics

2. FX markets has declined during periods of market stress, particularly post CHF float in Jan 15.

3. Technological innovation has lowered transaction costs, enabling wider set of players to participate, by increasing the channels for market access and contributing to:

  • Increased market fragmentation by highly concentrated large bank dealers internalising client flows,
  • Proliferation of new platforms
  • Enabling more non-banks to participate in FX markets

All in all, technology has made possible the use of (algorithmic and high-frequency) trading strategies that are viewed by many market participants as having changed liquidity dynamics – enhancing liquidity in normal conditions and offsetting the impact of market fragmentation, but also adding to FX volatility in stressed market conditions. These elements are particularly evident in global FX markets, including the USD and CAD, but are also present in Latin American currency markets.

4. The impact regulatory change on FX market liquidity remains unclear and requires further study.

  • Changes in bank behaviour to discourage risk-taking in the FX market is uncertain
  • Fines and requirements for participants to closely monitor trader behaviour, have reduced incentives for dealers to engage in discretionary risk trading
  • These developments may have prompted large bank dealers to shift their market-making activity from the open FX market into their own internal market

The table below show the various FX liquidity metrics used by participants in different countries/regions in the Americas in response to central bank questionnaire.

FX Liquidity Metrics by location

Full BIS report available here

Understanding the quality of FX liquidity provision (why not all FX liquidity is created equal)

Global FX markets are in transition, the catalysts include tougher regulation, higher capital costs and reductions in leverage ratios. As a result, we are seeing continued fragmentation of liquidity across primary venues, and reduction in risk appetite by banks who are scaling back on market making, leverage and appetite for risk warehousing (position taking).

Non-bank market makers: Against this backdrop, we have seen an inexorable rise of the non-bank market makers, with newer technology and less onerous regulatory costs, stepping in to fill the market making gap and grow their global share of FX volumes. Indeed according the latest EuroMoney 2016 FX survey, non-bank market maker XTX (whose Co-CEO, Zar Amrolia was until a year ago, co-head of FICC at the mighty Deutsche bank), now rank 9th in overall global FX market share, 4th in global FX Spot and 3rd in global Spot e-trading market share.

As a consequence of fragmented liquidity pools, banks and brokers are increasingly turning to electronic aggregation services, in order to access the available liquidity they require from across venues and liquidity providers (LPs), for use by traders and as input for Rate Engines, in order to effectively service their clients and risk manage the resulting flows.

However, aggregation on it’s own is not the answer. As trading on the best aggregated price (best bid-ask at top of book), does not always deliver the best results. This is because, not all liquidity is created equal. Banks and brokers that aggregate multiple liquidity providers into a single stream need to understand the quality and characteristics of the liquidity they consume, as they may well find that simply combining all their LPs and then hitting what seems the best price, does not necessarily deliver the best results!

So, what determines the quality of LPs pricing, and how can banks and brokers separate the good from the not so good liquidity provision?

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The power of Analytics: Analytics has now become a critical component in any eFX business. Only by leveraging real-time trading analytics can firms truly understand the quality of liquidity they aggregate, and then use those analytics to optimize LP selection to ensure they are consuming the best liquidity for their needs.

At TradAir, we use BigData analytics that enables clients to analyse flows, with a real-time suite of trading analytics that provides the deep insight needed to understand and optimize the LPs being aggregated. By comparing LP metrics by currency pair, one can understand the quality of LPs such as: Spread Ranking (by trade size/time day), % time top of book (how well do they price), refresh update rates, available liquidity (how much liquidity do they offer, and changes in that liquidity over time), last look latency (how long do they hold your order before confirming trade) etc, which all help to understand and rank LPs based on their ability to price.

LPs ability to internalize flows? More detailed analysis of LP pricing can show an LPs ability to absorb or internalize flows, with metrics such as fill ratios, reject rates, market impact and cost of rejection. Here what we are looking at is to measure how much of an order an LP fills, and what their pricing looks like post execution.

If the order is not completely filled, and the LP isn’t able to internalize that flow, but begins to unwind the amount they did fill, then it’s likely that their pricing will reflect that, and the cost of filling the residual of the original order will increase as the market impact of the partial execution increases with the ripple effect of LPs unwinding the flow – the LP is actually competing with the residual of the original order.

In some cases, firms with larger size trades to execute, may well find they get better overall fills by aggregating Full Sum streams from their LPs. These are streams where the LP is pricing for the full amount and will do all or nothing of the trade, thus removing the risk of partial execution and market impact of residual cover.

At TradAir, we also have a team of liquidity management experts that work with both our LPs and clients, to ensure that LPs are providing the right liquidity, and that clients understand how best to leverage the analytics to aggregate and optimize the mix of available liquidity in order improve execution performance.

So, in summary, whilst not all liquidity is created equal, using a platform such as TradAir that offers powerful real-time trading analytics, can empower price taking banks and brokers to understand and optimize their liquidity providers in order to only aggregate the best LPs for each currency pair and for each volume size, improving their ability to competitively price and profitably and risk effectively manage resulting flow, and providing an outstanding trading experience for their clients.

Congratulations to Standard Bank, winner of FX Week’s 2016 award for ‘Best Bank South African Rand and African Currencies’

Back in April, we announced that Standard Bank South Africa (SBSA), had deployed TradAir’s FX Platform, including our market leading FX Aggregation and Rate Engine solutions, as part of their strategic vision to dominate Dollar Rand market-making, and create regional market-making specialists across Africa. 

So, it’s great to hear this week that Standard Bank has won the FX Week 2016 Award for ‘Best Bank for South African Rand, and African Currencies’.

Standard Bank South Africa

Tim Hutchinson, head of e-FX trading at Standard Bank, commented that, 

From a technology perspective, we’ve been pleased with the initiative we’ve been able to roll out this year, including our investment in TradAir”

TradAir’s leading FX platform, enables regional specialists like Standard Bank, to leverage their strong local expertise, to more effectively price and hedge the FX needs of their regional client franchise.

According to Richard de Roos, head of foreign exchange at Standard Bank,

“We are a regional specialist with a global reach. …. In the rand market, where internalisation does not occur at the 90 to 95 level, because of less liquidity, we obviously have to focus on the differentiators and on the benefits of having strong liquidity domestically.”

TradAir’s rate engine and aggregation solutions, enable regional specialists to provide robust and consistent pricing in their regional currencies to the wider market, and more risk effectively managing resulting flows.

Global FX volumes down 5% according to latest BIS FX Survey

Global average daily FX volumes (ADV) in April 2016 stood at $5,088bn/day, down some (-5%) on the April 2013 level of $5,345bn/day, according to the latest Bank of International (BIS), Triennial FX survey.

BIS Trienniel Survey 2016
BIS 2016 Triennial FX Survey

The decline was driven by a (-19%) fall in global spot volumes, the first drop in spot vols since 2001. Spot fell from $2,046bn/day in April 13 to $1,654bn/day in April 16. At the same time, spot FX share of total volumes fell from 38% of total in Apr 13 to 33% of total in Apr 16.

BIS Trienniel Survey by product 2016

BIS 2016 Triennial FX Survey Data by product

In contrast, FX Swaps volumes rose 7% to $2,383bn/day and share of total volume rose from 42% to 47% over the same period.

 

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Looking at chart below that shows market share by user segment, we can see that for the first time since 2001, reporting dealers share of total FX volumes has risen. Reporting dealers accounted for 42% of total volume in Apr 16 compared to 39% in Apr 13, driven by an increase in reporting dealer spot trading, which rose from 33% of total in Apr 13 to 37% of total in Apr 16.

The red circle in the chart showing, the cross over, when non-bank financial institutions (pension funds, asset managers and hedge funds), overtook reporting dealers back in 2007, with the largest market share in FX, which the table below shows peaked at 53% share in 2013.

BIS Trienniel Survey market share by segment 2016

BIS 2016 Triennial FX Survey Data by user segment

The BIS data seems to contradict what we read about banks pulling back from committing capital to market making activities, and non-banks market share rising, especially as this shows the first increase in deporting dealer share since 2001.

BIS Trienniel Survey table by Segment 2016

BIS 2016 Triennial FX Survey table by user segment

Regional Changes: Looking more deeply into the data, we can see a shift in FX volumes away from UK, and Europe and moving eastwards. Partly due to easier regulation, and partly due to the growth in the Chinese influence and trading in the Chinese Renminbi, which is now the 6th most traded currency pair. Looking at the top 20 countries and breaking them into regions, we see a clear shift to Asia.

Change in Market share 2016-13
BIS 2016 Triennial FX change in market share by region

Market share change for top six centres 2016-13
BIS FX Triennial survey: Top six trading locations FX market share 2016/13

Which three of the top six FX centres recorded new highs in ADV?

The major central banks have now released their Apr 16 semi annual FX volume surveys,

London retains its position as the largest FX trading centre, accounting for 51% of global total ADV, although that’s down from the 53% seen in Oct 15, which is the lowest market share since Apr 12.

Meanwhile, Singapore, Japan and Canada, all recorded new highs, both in terms of dollar ADVs, whilst Singapore and Japan also recorded new highs in terms of % of global ADV (as shown in table below in red (*).

Global ADV for top six-trading-centres
Global ADV by centre, showing new all time highs for Singapore, Japan and Canada. (Apr 16 compared to Oct 15)

For the interesting details read more…..

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When looking at volumes by product (excl NDFs) in the table below, we see that nearly 80% (actually 76%) of the increase in total ADV, being accounted for by FX Swaps (53%) and Fwds (23%).

Global ADV for Change in Fwds and Swaps top six-trading centres-
Global ADV by product, showing Fwds and FX Swaps accounting for 76% of all increase in global ADV (Apr 16 compared to Oct 15)

Interestingly, Singapore accounted for the biggest increase in global ADV for both FX Swaps and Fwds. As seen in the table below, Singapore accounted for a whopping $41bn/day (71%) of the total $78bn/day increase in ADV for Fwds. Whilst in terms of FX Swaps, Singapore accounted for $65bn/day (43%) of the total $182bn/day increase in FX Swaps.

Global ADV for Change in Fwds and Swaps top six-trading centres--
Global ADV increase by centre for Fwds and FW Swaps (Apr 16 compared to Oct 15)

Not sure what’s behind the big increase in Singapore vols, other than FX swaps being used extensively by banks to raise liquidity across money markets denominated in different currencies, but that doesn’t necessarily explain the Singapore effect?

Not sure if we are seeing a liquidity, or regulatory effect at play here. But anyone with thoughts about what has been driving the increase in Fwds and FX Swaps vols in Singapore, please ping me at Paulb@TradAir.com and I will update the post.

BofE FX volume survey Apr 16: London vols +5% (-11% YoY) – read full details

The latest central bank semi annual FX surveys for April 2016 have been released. This post will examine the Bank of England (BofE) survey data for signs of trends in the global FX market.

London FX Average Daily Volumes (ADV) headlines:

  • Total ADV: $2,212bn/day (+5% in 6mths to Apr 16, -11% YonY)
  • Spot ADV: $755bn/day (+4% in 6mths, -22% YonY)
  • ADV for Single-Dealer Platforms (SDP): $290bn/day (-1% in 6mths to Apr 16, +5% YonY)
  • ADV by Multi-Dealer Platforms (MDP): $391bn/day (+11% in 6mths to Apr 16, -4% YonY)
  • Dollar Yen (USD/JPY) ADV $360bn/day, up $76bn/day (+27% in 6mths to Apr 16)

For the interesting details read more…..

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  • Overall volumes: Overall volumes are up 5% and looking at the chart below, volumes are still well below previous peaks seen

BofE FX volumes Apr 16
Bank of England ADV in FX for Apr 16

  • Currency Pairs

Looking at the top ten currency pairs:

  • EURUSD was the top traded pair with vols of $621bn/day (28% of total ADV), although ADV were -1% lower than in Oct 15.
  • USDJPY was second highest vols at $361bn/day (16% of total ADV), and a 27% increase over Oct15, actually accounted for 74% of the total ADV increase between Oct 15 and Apr 16.
  • Top ten: Top ten pairs accounted for 77% ot total ADV

BofE Top 10 Curr pairs Apr 16
Top ten Currency pairs by ADV Apr 16 BofE data

  • Products: In terms of products being traded, overall breakdown has not really changed: Spot 34%, FX Swaps 47%, FWDs 10%, NDFs 3%, FXO 5%
  • SDP vs MDP: In terms of SDPs and MDPs, volumes on MDP continue to outpace SDPs, with the ratio of flows going through SDP vs MDP falling from 83% to 74%.

SDP vs MDP volumes Apr 16

Single (SDP) vs Multi (MDP) dealer volumes Apr 16

  • Product mix between SDP vs MDP:
    • Overall $101bn/day flowed from SDPs to MDPs in Apr 16, the shift was $41bn/day more than seen in Oct 15. When breaking this down by products, the biggest switch was:
      • Spot saw $92bn/day of flows moving from SDPs to MDPs in Apr 16, a 67% increase compared to Oct 15
      • Fwds saw $26bn/day of flows moving from SDPs from MDPs in Apr 16
      • FX Swaps: saw $24bn/day of flows moving from MDPs to SDPs

 

Product switch from SDP to MDP Apr 16

Changes in flows by product between (SDP) vs (MDP) Apr 16

 

  • Client Segments

When looking at client segment flows, we can see that only Reporting Dealers (large banks), and Non-Bank Financial Institutions (Hedge Funds, Asset Managers etc), saw increased volumes, whilst Other banks and corporate clients saw falls in volumes in the 6mths to Apr 16, although all segments saw a fall YonY.

BofE ADV by client segment Apr 16
BofE data showing volumes by client segment Apr 16

Finally, if we look at the client segment data by channel, we can see where the flows are going in terms of SDP and MDPs. We see that:

  • Reporting Dealers:  Flows increased by +19% on SDPs, and saw a 105% shift in flows from MDPs to SDPs in 6mths to Apr 16, and 315% shift YonY
  • All other segments: Saw a contiued shift in flows from SDPs to MDPs

BofE ADV by client segment switch from SDP to MDP Apr 16

Tables showing ADV by client segment for SDP and MDP and shift in volumes Apr16

How market participants are preparing for Brexit

Financial markets are braced for a period of extreme ‘Brexit’ volatility in the immediate aftermath of the UK referendum on EU membership. Research from Goldman Sachs analysts talks of a possible ‘Lehman type’ scenario that could see Sterling fall by as much as 11% on a trade weighted basis, should the vote be to leave.

Perhaps not on the same scale as the seismic move that occurred last January in EURCHF, when the Swiss National Bank (SNB) withdraw support for the EURCHF 1.20 peg, resulting in cross falling some 30% in minutes to a low of 0.85 before rallying slightly over the next few days, as seen in the chart below.

EURCHF-15 Jan 15

SNB stops defending the 1.20 peg on 15 Jan 2015: EUR/CHF move from 1.21 to 0.8520 in minutes

The move cost market participants billions, and resulted in…


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FXCM being rescued by Leucadia National. In my blog post ‘when liquidity disappeared‘, I covered FXCM’s analysis of the SNB move on their inability to access liquidity, and it’s worth reading again to understand the magnitude of the shock wave that hit the markets, as shown graphically in the charts below.

 

FXCM - EURCHF

Chart showing timeline for the extreme EURCHF volatility from FXCM analysis

So, like those who have been through a hurricane, market participants are now busy battening down the hatches, and putting in place precautions and emergency measures to deal with the expected increased volatility and liquidity shortage that will likely follow in the immediate aftermath of hurricane ‘Brexit’, when she hits the UK mainland on Thursday night.

Precautions can range from brokers that are increasing margin requirements on Sterling related crosses, to others who will cease quoting all Sterling crosses around the voting. Whilst major market making banks (and non-banks), will be looking to run 24hr trading operations, while sales teams are no doubt busy advising clients about their execution policies in such volatile markets, and trading venues are checking their platforms, and informing clients of trading rules that will deal with off market quotes.

Here at TradAir, we have put in place measures to ensure our cloud based eFX platform, and all servers remains stable, and Liquidity Providers (LPs) are able to provide sufficient liquidity to ensure high fill ratios for transactions for our clients and their customers. That means, ramping up our support, and increasing the level of pro-active ‘real-time’ monitoring of our entire platform, and all client and LP connections.

The final precaution, (and one I hope all platforms are doing this), is that we have contacted all our clients, and sent them quick reminder guides showing all the risk protection settings available on the TradAir platform, to ensure effective risk management, such as setting slippage to an appropriate levels on per currency basis, and looking at hedge rules and rate engine volatility settings and more.

So, whilst Brexit may not be on the same scale as the SNB event, nonetheless it’s going to the very rough ride for a while, so keep your head down, and good luck to all who will be trading or making markets over the event risk.

FX Global Code of Conduct

Yesterday the Bank of International Settlements (BIS) FX working group (FXWG), under Guy Debelle (Reserve Bank of Australia), released the first section of the new FX Global Code of Conduct, with final release of the complete code of practice due in May 2017. The code is a response to recommendations set out in the FEMR report (see my other blog for coverage) published by the Bank of England last year. The Bank of International Settlements (BIS), was tasked with drawing up the new global conduct rules.

The code is organised around six Meta principals, being:

  • Ethics: Market Participants are expected to behave in an ethical and professional manner to promote the fairness and integrity of the FX Market.
  • Governance: Market Participants are expected to have  robust and clear policies, procedures, and organisational structure in place to promote responsible engagement in the FX Market.
  • Information Sharing: Market Participants are expected to be clear and accurate in communications, and protect confidential information  to promote effective communication that supports a robust, fair, open, liquid and appropriately transparent FX market
  • Execution: Market Participants are expected to exercise care when negotiating and executing transactions in order to promote a robust, fair, open, liquid and appropriately transparent FX market.
  • Risk Management and Compliance: Market Participants are expected to promote and maintain a robust and control and compliance environment to effectively identify, measure, monitor, manage, and report on the risks associated with their engagement in the FX Market.
  • Confirmation and Settlement Processes: Market Participants are expected to put in place robust, efficient, transparent, and risk-mitigating post-trade processes to promote the predictable, smooth, and timely settlement of transactions in the FX Market.

The code will apply to ‘all FX market participants’ that engage in the FX Markets, including: Sell-side and buy-side entities, non-bank liquidity providers, operators of Trading venues, and other entities providing brokerage, execution, and settlement services.

Here at TradAir, we will continue to ensure that our eFX technology solutions, promote and support the highest levels of fairness and compliance, with the evolving FX Global Code of Conduct.

Obligatory reading for all engaged in the FX Markets, full report available here

EuroMoney 2016 FX ranking, the year of the ‘alternative’ market-maker

The EuroMoney FX league tables have been published, and there are some really interesting ‘structural’ changes in the positions of the top ten.

Firstly, we see the entrance of XTX (see chart below), an alternative, or non-bank market maker storming in 9th position. This is hugely important, and goes to the heart of what’s happening to FICC capital markets.

EuroMoney Top ten FX rank 2016 and 2015

EuroMoney FX ranking, top ten 2016 and 2015

And it sums up the cumulative effect of the regulatory impact of increased capital costs, continued misconduct fines, and an overall reduction in risk appetite by the top banks, who are pulling back from market-making, moving to a capital light model, where they look to act in an agency rather than principal capacity. As a consequence, firms like XTX, with their superior pricing engine technology, and filling that liquidity gap, by becoming liquidity providers to the market in general, and perhaps also to some of these top ‘liquidity provider (banks)’ who are pulling back. Also intersting to

Given that

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Zar Amrolia, the co-CEO at XTX, was until last year, Head of FICC at Deutsche bank. I suspect we will see XTX continue to rise in the ranking, perhaps eclipsing Deutsche bank, which would be a confirmation of the ‘changing of the guards‘, as I wrote on my other blog last year.

EuroMoney ranking 2016

EuroMoney X ranking table showing rank, market share and change in market share

Looking now at the three banks who for years dominated the league tables, namely Citi, Deutsche and Barclays, it’s interesting to see that they have all recorded big falls in their market share, as can be seen in the chart below, with Deutsche seeing a massive fall in market share from 14.54% in 2015 to 7.86% in 2016.

EuroMoney Top ten FX ranking 2016 vs 2015

Change in Market Share for the top ten FX ranked providers

The final chart, shows the overall change in market share within the group.

What’s interesting here, and follows on the above chart, is the continual fall in market share of the top ten ranked players. The market share of the top ten has fallen from 78% in 2013 to 66% in 2016. This fall, clearly mirrored findings from research house Coalition, who analyse the FICC revenues at the top investment banks. There latest research, shows that over the past year, FICC revenue of the top 12 investment banks fell 28%, whilst FX G10 revenues were down 32%, and front-office FICC headcount down 5%.

So, where has the market share gone?

Well, I don’t have access to the full report this year, but I would guess that as with previous years (see my EuroMoney 2015 post on other blog), the lower ranked banks have increased their market share at the expense of the top banks, as a result of investing in new eFX technology to enable them to better compete in the market. This is what banks like Standard Bank of South Africa (SBSA) are doing:

Standard Bank have deployed TradAir’s eFX platform as part of their strategic vision to dominate Dollar Rand (USD.ZAR) market-making globally, and create regional market-making specialists across Africa.

EuroMoney Top ten FX ranking by group 2013-16
EuroMoney top ten market share continues to fall

With the right eFX platform, regional banks can become world class market makers

Since almost forever, the global top tier banks have dominated the FX markets. One only needs to review the EuroMoney FX bank rankings to see the global elite ‘flow monster’ top ten are pretty much the same group today as they were a decade ago.

EuroMoney top ten FX banks 2015 compared to 2008
EuroMoney Top Ten FX banks 2008 & 2015

When looking at market share of banks, we see from the chart below, that whilst the top banks still have the largest share of global FX flows, the market share of the top five FX banks has actually fallen from 58% in 2008 to 53% in 2015, an -8% fall. Whilst over the same period, the market share of banks ranked 21-50 rose from 3% in 2008 to 8% in 2015, a 178% increase (although from a much smaller base).

EuroMoney market share 2008-15
EuroMoney FX survey data, highlighting change in Market share ranking for groups of banks between 2008-15

Some of the drop in market share of the top tier banks is a result of increased regulatory capital costs, and a reduced risk appetite, resulting in many banks stepping back from aggressive market making just to gain market share and flow. Now these top banks are more selective about liquidity provision.

What’s interesting, is the rise in market share of

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the smaller regional banks. These banks are hiring talent from top tier banks, including eFX technologists and strategists with experience of building a strong eFX franchise. However, the regional banks aren’t looking to build from scratch, what they are doing is investing in new world class web/HTML5 eFX technology systems and modular platforms to enable them to rapidly upgrade their capability.

Investment in ‘world class’ eFX platforms: Regional banks, are investing heavily in world-class eFX technology solutions, in many cases replacing legacy systems. This has enabled them to rapidly step up their ability to provide liquidity to their clients, and become market-makers in their core regional currencies to the wider market.

This is what banks like Standard Bank of South Africa (SBSA) are doing:

Standard Bank have deployed TradAir’s eFX platform as part of their strategic vision to dominate Dollar Rand (USD.ZAR) market-making globally, and create regional market-making specialists across Africa.

Standard Bank South Africa

Analytics is the key to unlocking value embedded in FX trading flows

Interesting to see Lloyds Banking Group recently entered a partnership to leverage Google’s ‘BigQuery’ analytic platform to help ‘unlock hidden trends in retail customer behaviour‘. Although this is not (yet) for their trading platform.

In a trial project, a joint Lloyds and Google team was able to ‘analyse one year’s worth of front-end analytical data in under a minute’., and according to Reza Rokni from Google says: “This is the first time we’ve done something like this with a bank, and it’s placed Lloyds about 18 months ahead of peers in the use of data analytics.”

So what about leveraging BigData to analyse trading flows?

Given that around 70% of global FX volumes are executed electronically, it seems many FX trading platforms, are still providing just basic trade stats, which means there are plenty of banks and brokers out there, gaining little or no insight into the trading behaviour of clients, or the pricing characteristics of the liquidity providers (LPs).

Here at TradAir, we embraced

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the cloud and BigData a while back, building a real-time trade flow analytic platform call TradAir NOWwhich leverages the cloud, Google’s BigQuery and a suite of HTML5 dashboards to render and display staggering amounts of real-time data.

According to Matthieu Mayran, at Google;

“We are really excited to see TradAir’s innovative trading analytic platform leveraging Google’s BigQuery. Analyzing the vast amounts of real-time data generated by trading platforms, can be technically challenging.

But TradAir’s solution makes this much easier, and helps their customers to gain deep insight from their trading data.”

If Google reckon Lloyds are 18mths ahead of their competition, then I guess that put’s TradAir and our clients at least 18mths ahead of their competition in terms of leveraging data analytics?

Currently we upload around 20billion ticks/day, and in terms of processing performance, Google BigQuery can can analyse around 5bln records (depending on complexity), in under 10 seconds.

The service enables our bank and broker clients to unlock the value embedded in those trading flows, and gain unprecedented insight into the profitability and trading behaviour of client flows, and the quality of their liquidity providers.

TLA-1

TradAir NOW: HTML5 ‘click-through’ display dashboards, built with Google BigQuery

TLA2
TradAir NOW, carousel of Analytic widgets

More on TradAir NOW here

Why is London leading the European FinTech charge?
http://http://www.redherring.com/finance/london-leading-european-fintech-charge//

Financial technology – or FinTech, to lend it the inevitable portmanteau – has become one of industry’s hottest topics over the past few years. Companies which allow financial institutions the chance to reduce fraud, hike value and ease payments, have begun to penetrate a market traditionally dominated by huge incumbents. The game is on.

Banking is one of the world’s oldest continuous industries, and Europe’s market, especially, is dominated by a host of monolithic players, some of whom have been around for centuries. It doesn’t seem the most inviting entry into the tech world. That age, says Schneider, is one of the keys to FinTech’s recent surge: “Because the tech banking systems use has been built over years and years, these enormous systems are creaking at the seams, and require new technology to take off some of the weight.”

 

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INTL FCStone Partners with TradAir
http://www.profit-loss.com//

INTL FCStone has partnered with TradAir to help power its e-FX global offering.

The two firms will work to offer clients an end-to-end e-FX solution with flexible technology and optimised liquidity to service their markets and clients.

TradAir’s end-to-end infrastructure is designed to integrate with INTL FCStone’s existing components, infrastructure and distribution channels, enabling the latter to offer its traders and clients customised and enhanced pricing.

The TradAir True Rate Engine supports price creation and coverage across trading venues, utilising algorithms alongside real time data analysis and human interaction, enhancing interaction with clients and liquidity providers.

“The TradAir technology will help to make our trading desks more efficient, in a very short time frame, while providing the flexibility to enable us to service our clients across the infrastructure of their choosing,” says Edgar Ramon, global head of FX at INTL FCStone. “This will consolidate our trade flow, enabling us to optimise pricing and risk.” – Galen Stops, Profit & Loss

 

Untitled

 

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The TradAir NY office

42NY

TradAir closes a $15 million growth equity round

Long Ridge Equity Partners led the round with the participation of TradAir’s existing venture capital investors-  Carmel Ventures and Genesis Partners; Cliff Lewis Joins as Chairman

London, New York, Tel Aviv xx Jan 2015 – TradAir, a leading provider of foreign exchange trading technology, announced today that it recently closed a $15 million growth equity round led by new investor Long Ridge Equity Partners. TradAir’s existing venture capital investors, Carmel Ventures and Genesis Partners, also participated in the round. The new financing positions TradAir to continue its rapid growth and further bolster its technology capabilities. Concurrent with the investment, former Currenex CEO Cliff Lewis will join TradAir as Chairman.

TradAir’s technology allows banks and brokers to lead in the global, electronic FX market. TradAir offers a novel end-to-end trading solution that includes a robust rate engine, liquidity aggregator, and front end interface. TradAir’s proprietary TLA® (Total Liquidity Analysis) module offers FX e-commerce participants unprecedented vision into deal flows and market liquidity, allowing them to make strategic decisions on pricing and hedging.  TradAir is a market leader in HTML5 development, and its’ modular technology architecture allows for seamless integration into existing trading infrastructure.

“Given their deep expertise in financial technology and the trading market, we are very excited to partner with Long Ridge,” said TradAir CEO Illit Geller.  “We have a strong track record of success with our clients and access to additional capital will allow us to continue to grow and deliver market-leading technology to the market.”

“We are impressed with the success TradAir’s team has achieved over a short period of time,” said Jim Brown, Long Ridge’s Managing Partner.  “The company has developed a strong reputation as a technology leader and client feedback is very positive.  We are excited by the opportunity to partner with the TradAir team to build a leading technology business.”

Concurrent with Long Ridge’s investment, Cliff Lewis will join TradAir as Chairman.  Cliff Lewis formerly served as CEO of Currenex, a leading FX trading platform acquired by State Street in 2007.  Following the sale of Currenex, Cliff joined State Street as Executive Vice President with responsibility for the electronic trading business (e-Exchange). Cliff is also a management board member for CBOT-EUREX.

“We are delighted to have Cliff join our company as Chairman,” said Illit Geller.  “Through his impressive 30-year career, he has become a leader in capital markets.  His deep domain

The TradAir London office

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T55 Old Broad Street, London EC2M 1RX

Virtual Machine Just Became Obsolete – Docker V1.0

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The xxx most interesting announcement made last week was the launch of  Docker V1.0.

TradAir uses Docker to build and ship higher-quality applications, faster.

It’s a new age of agile and creative development, by building “the button” that enables any code to instantly and consistently run on any server, anywhere.

Avi Zloof,

Director of Innovation at Tradair.com
Yapi Kredi Selects Tradair FX Rate Engine
http://http://www.profit-loss.com/

Yapi Kredi, one of the largest banks in Turkey, has selected the Tradair Rate Engine and Distribution service from technology company Tradair for its global foreign exchange trading desk.

The bank will use the service, a neutral price distribution network, to stream prices to various platforms as well as to its own internal branch network.

The rate engine supports price creation across trading venues, using algorithms for better pricing, alongside data analysis and liquidity management for optimisation. Tradair Distribution is a market making focused network that streams to all venues, including participating banks’ own internal systems.

The Tel Aviv-headquartered company, founded by Illit Geller and Ayal Jedeikin, two former senior executives at Traiana, offers a modular suite of front office technology including the Tradair Rate Engine, Tradair Distribution, Tradair Aggregation, Tradair White Label and Tradair Algo.

Using these products, banks such as Yapi Kredi are able to provide better pricing for their customers and improve their distribution to, and penetration of, global markets, introducing new revenues, the company says.

Geller, CEO of Tradair, says that as a result of Yapi Kredi delivering customised price distribution to its clients and branch network, “it will be able to participate in the FX market alongside the leading global banks on an equal footing.”

Tradair’s technology brings together the functions of source selection, pricing, distribution, risk and order management, as well as hedging, in one screen.

“Traders no longer need to view multiple screens to manage and participate in their local currency pricing/trading; instead they can focus on expanding their market opportunities,” the company says.

Last week, Tradair, which also provides the technology that powers Tradition’s ParFX front-end platform, announced that Raiffeisen Polbank had gone live with the Tradair Rate Engine and Distribution service for its global FX trading desk.

Earlier this year the company expanded its senior manager line up with the hires of New York-based Brian Andreyko, previously CEO of MakoFX, as head of strategy and corporate development, and London-based Rob Wing, previously sales director and vice president for EMEA at Currenex, as head of sales.

The company will be releasing the names of further banks using its solutions over the coming weeks, a spokesperson says.

 

 

 

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Our front end just got stronger – Exciting Week for HTML5 Web Apps

This is an exciting week for HTML5 Apps: Chrome 64-bit was just announced.
Promising improved stability
better security using 64-bit built-in security features
and a performance boost of 25%;

  • Speed: 64-bit allows us to take advantage of the latest processor and compiler optimizations, a more modern instruction set, and a calling convention that allows more function parameters to be passed quickly by registers. As a result, speed is improved, especially in graphics and multimedia content, where we see an average 25% improvement in performance.
  • Security: With Chrome able to take advantage of the latest OS features such as High Entropy ASLR on Windows 8, security is improved on 64-bit platforms as well. Those extra bits also help us better defend against exploitation techniques such as JIT spraying, and improve the effectiveness of our existing security defense features like heap partitioning.
  • Stability: Finally, we’ve observed a marked increase in stability for 64-bit Chrome over 32-bit Chrome. In particular, crash rates for the the renderer process (i.e. web content process) are almost half that of 32-bit Chrome.

TradAir’s innovative front end is based on HTML5 and Chrome technologies for the past 3 years. TradAir will benefit from this technology upgrade, allowing TradAir to provide an even more exciting, personalized and unique user experience addressing the complex requirements of the FX market.

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Avi Zloof,
Director of Innovation at Tradair.com