FOCUS
risk and settlement of the executed trades: While institutions may face a prime brokerage bank, retail clients will settle with Dukascopy Bank directly.”
An increasing number of both retail and institutional FX traders are likely to be attracted to the ECN model because of the benefits of transparency and cost, says Kukel. “Pricing conditions have long been a major factor in choosing an executor, with the rise of electronic trading and processing speed has grown in importance for professional participants. Complying with the clients need for transparency is simply the next logical step to grow market share.”
“A stable and liquid trading environment, customer support and especially in the institutional business, efficient post-trade handling are all important considerations.”
Tere are several factors, in addition to transparency and cost, which should influence a trader’s choice of FX ECN marketplace to use, for both retail and institutional traders, says Kukel. “A stable and liquid trading environment, customer support and, especially in the institutional business, efficient post-trade handling are all important considerations. Added values such as charting, news, research and easy access come next.”
As the ECN market for both retail and institutional traders grows, these benefits will become important means of differentiation, says Kukel. “For retail clients the trading interface, the reporting tools and technical support are key areas. Software developments need to cater for a large field of requests and it can be tricky to increase functionality while preserving ease of use. Institutions require flexibility in post trade handling at the lowest possible costs. A lot of the new liquidity comes from funds and algo-traders that are trying to step in between brokers and banks. Tis works well in calm markets but it seems to have accentuated the risks during price spikes.”
Te retail and institutional ECN offerings are currently separate but as providers look to the functions and features that will make up the next generation of platforms, is there a prospect that the two sectors will converge? Kukel thinks this is likely. “Te retail and institution will converge as more and more solutions are available for post trades activities, such as Netlink. Tere are hardly any key functions that do not exist today. Minor additions for the user’s comfort can always be added, as long as it does not complicate trading.”
More efficient markeplace Dmitry Kukel
Gain GTX is a US-based independent ECN which is designed for hedge funds, high frequency traders and other buy-side financial institutions. According to Chief Operating Officer Vincent Sangiovanni, FX ECNs are helping to make the FX market more efficient by giving institutional traders more control over trade execution and position management as well as the ability to trade against prices made by ‘natural sellers’ or ‘natural buyers’, enabling buyers and sellers to meet at natural spreads. “Te FX ECN model is maturing and gaining wide acceptance not only in the buy-side community, but the sell-side community as well. Banks are realizing the value of ‘client to client’ trading possible in the ECN model, leading to greater interest
124 | april 2011 e-FOREX
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116 |
Page 117 |
Page 118 |
Page 119 |
Page 120 |
Page 121 |
Page 122 |
Page 123 |
Page 124 |
Page 125 |
Page 126 |
Page 127 |
Page 128 |
Page 129 |
Page 130 |
Page 131 |
Page 132 |
Page 133 |
Page 134 |
Page 135 |
Page 136 |
Page 137 |
Page 138 |
Page 139 |
Page 140 |
Page 141 |
Page 142 |
Page 143 |
Page 144 |
Page 145 |
Page 146 |
Page 147 |
Page 148 |
Page 149 |
Page 150 |
Page 151 |
Page 152 |
Page 153 |
Page 154 |
Page 155 |
Page 156 |
Page 157 |
Page 158 |
Page 159 |
Page 160 |
Page 161 |
Page 162 |
Page 163 |
Page 164 |
Page 165 |
Page 166 |
Page 167 |
Page 168 |
Page 169 |
Page 170 |
Page 171 |
Page 172 |
Page 173 |
Page 174 |
Page 175 |
Page 176 |
Page 177 |
Page 178 |
Page 179 |
Page 180 |
Page 181 |
Page 182 |
Page 183 |
Page 184 |
Page 185 |
Page 186 |
Page 187 |
Page 188