A new survey of 50 leaders in FX trading – 57% of which work for firms managing over $100bn of assets – has been commissioned by The Finance Hive team.
Two years after its introduction in 2017 the FX Global Code (FXGC) is a defining ideal of the FX market, with significant sell-side and more recent buy-side adoption. The FXGC principles are not a regulatory requirement but foster best global practices to avoid market abuse. Additionally, each regulator also has its own standards for monitoring algo and human trading activity.
As firms increasingly access electronic execution for FX, the right decisions for deploying and selecting algorithms are, as Anna Reitman discovers, a combination of getting knowledgeable about market technologies and tapping into the lessons of traditional wisdom.
While many firms tend to pick a strategy or two and stick with that, Pecora Capital LLC prefers to mix things up. The Swiss-based macro investment management firm uses a variety of algo-based systems to navigate the world’s FX markets. What’s more, Managing Director Aaron L. Smith and Head of Trading William Adams see no reason why man and machine can’t work together. Smith calls the approach ‘managed systematic’.
With Mark Goodman, Global Head of Electronic Execution (FX, Rates, Credit, Futures) at UBS Investment Bank, Scott Wacker, Global Head of e-commerce Sales and Marketing at JP Morgan, David Mechner, CEO, Pragma Securities, Nickolas Congdon, Head of E-Trading Services at Commerzbank and Fergal Walsh, Managing Director, Global Head of FX Algorithmic Execution at Citi.
Anna Reitman talks with leading providers to discuss how a new generation of FX algorithms, analytical toolsets and order routing solutions are giving clients more control over the way that their orders are placed, as well as access to more detailed pre- and post-trade analysis than has ever been possible before.
Algorithms have enjoyed persistent growth in the FX markets in recent years. And all the signs are for continued expansion, with more buy-side firms appreciating their ability to reduce trading costs and improve execution quality across an increasingly fragmented FX universe.
Regulatory change has further accelerated the need for institutions to take control of their FX execution process and show transparency throughout the lifecycle of an order. The trend we are observing requires the building of a process-driven execution policy, automation of low-value orders and the ability for a user to have full platform oversight, from inception to delivery.
QCAM Currency Asset Management is the largest independent currency manager in Switzerland and has been in the business for more than 13 years. It offers its own currency overlay services, FX best execution, FX single strategy v-Pro, and general FX advisory and liquidity management solutions. Clients include both public and private pension funds, asset managers, family offices and foundations. It is now in the very early stages of taking a closer look at starting to use FX algos says Andy Schümperli, from the Institutional Sales team at the firm.
QuantInsti (QI) is one of Asia’s pioneering Algorithmic Trading Research and Training Institutes, focused on preparing financial market professionals for the contemporary field of Algorithmic and High Frequency Trading. Headquartered in Mumbai with a subsidiary in Singapore, QI was founded by iRageCapital and a team of Quantitative and High Frequency Traders and domain experts dedicated to providing practical knowledge to professionals interested in Algorithmic Trading.
