Alex Shterenberg, Co-Head of FX Cash and Electronic Trading and Mauricio Sada-Paz, Head of eFICC Product and Distribution joined us to discuss their BARX FX offering as well as their new Algo initiatives.
It’s been over a year since Barclays relaunched BARX as their cross asset electronic trading platform. How has that strategy evolved and specifically impacted the BARX FX offering?
(MSP) Under the leadership of Nas Al-Khudairi, BARX is now an integrated, cross-asset electronic trading platform across Equities, Fixed Income, Futures, and FX. The unified offering includes numerous e-trading solutions and innovations available to clients, and investment in the platform continues. Clients appreciate accessing the power of Barclays consistently through a single electronic platform with capabilities across various products.
(AS) Our electronic FX business has operated under the BARX brand for over a decade and has earned its reputation as being a consistent and innovative provider of liquidity. Our intention with the relaunch of BARX was to strengthen our core offering, such as connectivity to clients, suite of algos and pre and post trade analytics, which we believe we have achieved. From there, we continue to execute on significant development efforts intended to optimize liquidity and pricing.
BARX Peg continues to be a core component of your FX algo platform. How has this algo evolved since going live?
(MSP) BARX Peg continues to be our flagship offering. The algo pegs to BARX pricing and clients enjoy the benefit of filling their orders entirely through the process of internalization. As part of our ongoing initiative to optimize this algo, we have recently added skew parameters and continue to see an increase in client demand since the initial launch in 2019. While BARX Peg is our flagship offering, it is a component of our much larger Gator platform which has also been a key growth area for the franchise.
What other changes have occurred within the Gator platform?
(AS) As part of our Gator Liquidity Optimization initiatives, we intend to expand BARX principal liquidity available within Gator, our electronic order execution channel combining liquidity available on external venues with BARX principal liquidity. The expanded principal liquidity features within Gator will be branded as BARX Book for FX. Addtionally, we have also increased the number of external liquidity providers available on Gator.
We also expect to release our implementation shortfall algo, Adapt, this month. The algo seeks to allow clients to manage the trade-off between arrival price slippage and execution price risk. Execution speed is designed to be faster at the beginning of the order and decreases over time. Clients can choose an Execution Style which includes Passive, Neutral, or Aggressive. Each Execution Style is used to determine the execution profile which is intended to minimize market impact for a given level of risk.
Lastly, our Gator algos have been extended to support non-deliverable forwards with one month tenors. This extension was driven by strong client demand, particularly in Asia.
(MSP) It’s important to acknowledge while Gator is an important component of BARX, we’ve also invested in other aspects such as connectivity and analytics. The launch of BARX Direct is exciting. We spent significant development efforts to upgrade our eFX technology stack which, combined with our trading expertise, has unlocked opportunities for further innovation in our pricing models and predictive analytics. We have also optimized our colocation strategy so that our upgraded dynamic pricing can be delivered to clients with much lower latency.
Algo Centre is another feature we have developed for clients. This web-based proprietary tool provides in-flight order management and pre and post trade analytics. The in-flight order management feature is new functionality while the pre and post trade analytics build upon our already mature TCA product.
How does Barclays compliment the innovative electronic capabilities with the relationship aspect of the business?
(AS) Our focus is always on our clients and customers and we remain committed to being a reliable liquidity provider. We maintained this position during the turbulence of 2020 and while some competitors may have pivoted, we continue with our strategy to provide innovative solutions for our global relationships.
(MSP) Product is certainly a critical part of the proposition. However, our coverage model is extensive and includes content and analysis. In addition to our research capabilities available via Barclays Live, the BARX FX team publishes content based on what we are observing from a liquidity perspective. We remain engaged with clients to discuss market structure, the use of data science and the partnerships between voice and electronic execution desks.
Please visit BARX.com for more information