Transparency, flexibility and liquidity - redefining standards in electronic FX options >>>
need, as opposed to static exchange strikes, lots and dates. Further down the road, the FX Bridge platform will be further extended to offer pricing for exotics, such as knock-ins, knock-outs and binary options. FX Bridge is also building automatic execution capabilities for configured strategies.
In addition to offering an options platform, the firm provides banks and brokers with a derivatives platform. “We fully support contract for differences (CFD) trading and options on CFDs. Tis is notable because there is a groundswell of interest around our CFD initiatives, particularly single stock and equity index CFDs. Equity traders are huge users of options, so our clients are looking to offer CFD options. In conjunction with our FX and commodities capabilities, we provide clients with technology that support the products they need to grow their businesses.”
Franck Dewannieux
“When an institution integrates its own model for an existing product, no specific work is required for the distribution and risk computation components to use it.”
According to Dewannieux the MX.3 platform design was based on Murex’s vision that all supported financial products, from the simplest vanilla option to structures, hybrid structures and complex exotics needed to be available for electronic dealing. He says: “Our clients can natively offer electronic trading on any financial product available in the platform. An extremely comprehensive set of products are natively available out-of-the-box and our clients can use our structuring tool and extension framework to define their own; all these are available for e-services without the need for any specific work.”
Much of the development work for trading FX options electronically is in unknown territory but the fact that the focus is very much on integrating options into fixed income and cross-asset platforms means that the work is paying off and FX options are fast-catching up other asset classes in terms of electronic trading.
Customised solutions
Stephen Best, CEO of FX Bridge Technologies, says the company has recently added customisable strike price, date, and amount FX options pricing so users can trade any date or strike price and quantity they
FX Bridge technology is highly flexible to serve the vendor’s wide range of bank and broker clients, which, in turn, serve a wide variety of retail and institutional market participants. In terms of pricing, there is flexibility to enable users to have separate spot and options price feeds from different banks, which can be integrated into one platform for them. FX Bridge’s platform can be further customised to support varied liquidity models, whether the bank or broker wants to manage an options risk book or pass the risk, in whole or in part, to one or more market maker banks. An analytics package enables end users and risk managers to look at the thousands of options available and come up with different strategies and risk scenarios.
He adds: “We have a range of trading, analytic, risk management, and post-trade solutions, delivered as modules and APIs. Tese are all tightly coupled to ensure low latency, something that is always going to be important regardless of what GUI or API the user is connecting through.”
Growing market
Te FX options market is a growing business and there are increasing numbers of electronic offerings coming to market – it is market that is ripe for automation. FX Bridge’s clients are primarily market making banks, providing liquidity, and broker-dealers and CFDs dealers, who are taking that liquidity. Best says there is more room for automation in the institutional space and FX Bridge has spent a lot of time talking to the market about what products they would like to see. He says: “I think it is clear that on some levels they would like to see a lot of tools that they currently have
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