Since Credit Suisse executed the first Peer-to-Peer algo trades on Siege FX in February, the platform has seen strong growth this year in terms of client numbers and activity. Siege has also completed integration with two other leading FX algo providers and is onboarding others.
Claude Goulet, CEO at Siege FX, says that for buy-side clients wanting to access liquidity on Siege FX through a bank algo that is integrated with them is a very simple process; all they need to do is tell the bank that they want to add Siege FX as a liquidity destination within their algo strategies.
“We see an increased interest from FX algo providers to partner with us. Siege FX offers a new and different way to optimise between market risk and market impact. When executing over a certain period, seeking liquidity in Siege gives the ability to monetise time risk without loss of opportunity.” Goulet adds. “This allows providers to create new algo strategies or gives them new ways to use existing strategies to leverage Siege’s unique liquidity. We expect this will continue as more and more algo providers look for ways to differentiate their strategies and respond to client demand.”
Goulet explains that Siege inserts a third variable in the ‘market risk vs market impact’ equation. In current processes, a portion of the order is held back to avoid information leakage, which only guarantees that it is not executed during that period. In the Siege mechanism there is no signalling risk and transactions occur at a pre-formed independent rate, thus removing market impact when submitting and executing orders. According to Goulet, this offers a brand-new way to look at algo execution strategies. By placing the bulk of an order in Siege while progressively accessing other markets and load balancing, the algo can securely seek market neutral liquidity and improve the execution profile.
“Algo users are aware of their execution costs and understand the value of Siege’s trusted environment in this context. We are very excited to be working with a growing number of forward-looking bank partners to find additional ways of delivering value to our growing community.” Goulet concludes.