RETAIL e-FX CLIENT
book” pricing by aggregating liquidity from multiple liquidity providers. “Tis ensures the client is able to trade on the best available price at any given time.”
Overcoming conflicts
High frequency and scalping strategies usually create conflicts between the client and market making brokers, says Brankin. “To cope with this type of order flow, brokers must have a proper STP solution that is able to route and distribute trades among many competing liquidity providers.” Divisa Capital provides API, Bridge, MT4 and direct access to multibank liquidity via our Currenex Hub. We saw an opportunity in the marketplace to create a firm that delivers institutional quality pricing, execution and technology to traders and partners who demand these services but were unable to obtain because of the time, cost or other factors.”
Tim Brankin
“We believe that someday we will be able to deliver the same low latency trading environment enjoyed by institutional FX traders,”
desktop (Currenex or MT4), API, Web and Mobile. When evaluating a trading platform, our clients always review the same criteria - execution speed, reliability and functionality. For these reasons, the majority of our clients still connect via desktop or API. Tat said, we realise that our clients want flexibility when it comes to accessing their account information and market data. As many studies suggest, web-based and mobile are going to be the fastest growing segments of the market for many years to come. As wireless technology continues to evolve and become more robust, we expect the number of clients connecting wirelessly to grow dramatically. For some traders, this may only mean connecting periodically to monitor the markets and their positions while other clients may migrate exclusively to wireless platforms via tablet computers.”
As well as the market interest around connecting to mobile and tablet devices, Mason says there is also a lot of interest around ECN trading platforms and the emergence of ECN brokers. Tis interest is basically a result of traders in the retail world seeking the same exclusive service as the institutional world, says Mason. Consequently, it is important for technology providers such as TradeSpot FX to deliver the tools that brokers need to providing streaming “top of
166 | january 2012 e-FOREX
Providers of liquidity bridging solutions have been big beneficiaries from the retail FX world’s growing sophistication and these bridges have become an integral tool for brokers looking to provide a more stable feed, tighter spreads via liquidity aggregation and drastically decrease execution times by automating trade execution/confirmation, says Mason. “In turn, this provides a robust trading environment for the end client increasing client retention while reducing the number of employees (“traditional” dealers) needed to run the brokerage. Te increasing sophistication of Expert Advisors (EAs) and automated trading systems is forcing traditional dealing desk brokers to seek automated trade processing and bridging solutions to handle this order flow. Most of the requests TradeSpot FX receives comes from brokers looking to add an ECN offering or to bridge a certain portion of their clients with ECN liquidity.”
Te provision of high performance DMA platforms and tailored execution services are other steps that retail FX brokers are taking to accommodate high frequency algo traders dependant on ultra low latency. “Some brokers are starting to setup VPS hosting in the same data centre to help minimise latency for their clients,” says Mason. For example, Divisa Capital also allows FIX API connectivity directly to its Currenex hub. “We regularly advise FX brokers in choosing the best combination of hardware, software, hosting, bridging and liquidity management to maximize performance and scalability. Tis combination is very important for the brokers in order to offer a reliable and competitive trading environment for their clients.”
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