Pragma is a multi-asset execution technology provider and we have to consider the different nuances of each and every market, particularly when trading FX. It isn’t ideal to take something that was built for equities or futures and apply it directly to a different asset class. The liquidity in FX, for example, is completely different as the market is bifurcated since it’s not a publicly traded market. Liquidity has to be curated at every single client level because it’s unique, unlike in equities where market data is disseminated across all participants.
You also need to be able to identify and manage firm liquidity versus last look within the algorithms and utilize them appropriately. So the characteristics of liquidity in the FX market are very unique, it is a dealer driven OTC market where there isn’t a vast amount of firm, guaranteed liquidity and it’s not regulated to the level that equities is. There’s also time zone considerations that have to be taken into account when trading FX over long durations. With the release of Panorama 2.0, we have developed a state-of-the-art AMS, specifically designed to meet the needs of sell-side banks and large institutions who are supporting clients. In order to have a successful algorithmic trading franchise, you need a team of support personnel that can watch and monitor the orders, answer any questions from clients as they come and to do so effectively, you need to be able to see what’s going on with the orders. This enhanced AMS provides our clients with a real-time scope of every single order that’s coming into the system and allows them to fully interact with the order. They can change algo parameters, modify orders, cancel them, there’s kill switches and they can change the strategies or can speed up or slow down the algo as needed.
In addition, Panorama 2.0 provides a full suite of dynamic visualizations for clients to view their performance in real time. It also gives them a full view into what the algorithm is doing – so not only where it’s getting filled, but where the algorithm is trying to slice out child orders and whether they’re getting fully filled, partially filled, rejected, etc. This way, if you want to block a venue because you don’t feel like you’re getting good hit rates or you’re consistently getting rejected, Panorama 2.0 allows you to take them out of the rotation. So, if someone on the algo coverage desk or eFX desk gets a question from a client, they’ll be able to leverage Panorama to tell them how their orders are performing, why the algos are doing what they’re doing, diagnose any issues and be able to pause or cancel everything if needed. Not only do banks and other institutions increasingly need to be able to offer FX algorithms when they’re offering a platform out to their institutional and corporate clients, but they need the tools like Panorama in order to effectively support the business. Clients aren’t going to trade if they’re not getting reliable support and you’re not able to give reliable support unless you can see what’s going on. This is why outsourcing works. Clients really like the new AMS and tell us it’s the best user interface on the street in terms of dynamic visualization, real time TCA and the enhanced levels of transparency that it allows them to offer to their customers. It is not only a window into the algo engine, but a tool that can influence the algo behavior, ensuring a greater level of control and flexibility for users.