RETAIL e-FX PROVIDER
>>>
offerings of our Bridge, co-located with many of the liquidity providers in data centres such as Equnix NY4.”
High frequency and automated FX
According to Larry Levy, head of sales and marketing at PrimeXM, a Swiss-based provider of MT4 services and tools, the impact of high frequency and automated trading on the FX market has been enormous and a large contributor to the demand for MT4 Liquidity Bridging services. “In the last three years we have seen an increasing confluence, mainly because of rather more sophisticated software and regulation between the retail and institutional markets,” says Levy. “Regulation and exponentially higher volume throughput on the Retail FX end has increased the need to STP flow, and this in turn has increased the demand for efficient Bridging between industry leading MetaTrader software and the back end interbank / LP / institutional broker market.”
Te fact that an increasing number of brokers are looking to reduce their exposure to high frequency traders by offering STP/ECN trading does create some issues, says Levy. “Firstly there is no guarantee that brokers who claim to be 100% STP are actually such. Some of them are either at the other side of the so called STP by setting up a third party company to do this or
they only stream part of their risk to the banks. Tis need not affect the quality of fills but if the broker fails to manage his book properly then he essentially puts his client monies at risk. A greater percentage of clients are now actually making money in forex in our opinion as service levels have gone up and spreads have come down. Terefore the time when you could just ‘B book’ all your trades without off laying the risk and hope for the best are riskier than ever. Brokers doing this are at increased risk of bankruptcy,” says Levy.
Tere are also technical challenges which the providers of Bridge applications are having to overcome, says Levy. “As a server based Bridge, the PrimeXM Bridge can support throughput of large numbers of trades per second without confirmation delays. Secondly, the Bridge is able to “take control” of the MT4 back end software to make sure that it “syncs” with the front end. Tirdly the Bridge features Non Latent Quote Streaming (NLQS). Tis ensures that old or stale quotes are thrown away and only the latest are processed. Tis makes for better client decision making on less latent data so giving better client service. Fourth - order types such as limits and nestled limits are well supported.”
Ticking the boxes
Such are the challenges in creating a quality MT4 Bridging application that few companies tick all the boxes, says Levy. “Te MT4 Bridge market has become a competitive place. Look very closely at latency, connectivity, security/backups, as well as the speed and reliability of the Bridge internally as well as the functionality itself in terms of price markup groups etc. Brokers all to often fall into the trap of taking a so called ‘free Bridge’, only to find, for example they are paying one to two hundred dollars a million extra in pricing while ‘saving’ four dollars a million on the Bridge. Not only are some of these so called ‘free Bridges’ rather expensive in reality - they are often very slow, leading to customer loss and all- round bad service. A good Bridge can literally make the difference between a broker’s profit and loss.”
Larry Levy
“Brokers all to often fall into the trap of taking a so called ‘free bridge’, only to find, for example they are paying one to two hundred dollars a million extra in pricing while ‘saving’ four dollars a million on the bridge.”
150 | october 2011 e-FOREX
A good Bridge can also go a long way to making STP more profitable for a Retail FX broker and therefore make them less tempted to take undue risk onto their own books, says Levy. “Tis reduces risk to both the broker and in turn the client. Secondly the price feed and the fills are significantly faster that the MT4 client with a correctly implemented Bridge which comes far closer to an institutional trading experience than was previously possible. Gone are the slow fills, order kills, and other daunting and demeaning experiences
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 |
Page 189 |
Page 190 |
Page 191 |
Page 192 |
Page 193 |
Page 194 |
Page 195 |
Page 196