What impact can the time of day have on FX liquidity and how much relevance does this have for algorithmic trading? Time of day can have a significant impact of the performance of execution algorithms, the FX market is OTC and for the majority of algorithmically tradable currency pairs the market is open 24/5 so […]
Algorithms are more popular than ever in FX. That statement isn’t a surprise to market participants, especially on the buy side. The Bank of International Settlements December 2022 Quarterly review highlighted growing market participants highlighted …
Buy-side algo usage in FX has steadily risen over the past decade. Algos were once the domain of only the most sophisticated market participants with enough resources to devote to development and research.
As the three year review of the FX Global Code progresses, we will likely see that the industry as a whole believes that buyside participants will benefit from increased transparency of their algo executions, says Nickolas Congdon, Head of eTrading Services at Commerzbank.
Algo adoption in FX has lagged other markets and one of the keys to increasing its adoption is to listen to buyside demands, So what are the issues these traders encounter and how can service providers address them?
For the most part of this millennium, buy-side firms have been looking to take more control of their trading processes, from direct market access to the use of execution algorithms, firstly in equities but now ….
FX traders at buy side institutions have embraced algorithmic execution in increasing numbers over the past few years. In part, their decision to use this execution style has been driven by a concerted sales effort that promises tighter execution spreads
There has been a marked uptick in the use of TCA (Transaction Cost Analysis) services within the FX market over the last few years. Doubtless significantly inspired by the FX Global Code and MiFID II, the use of TCA in FX has been suggested in some quarters to be a box-ticking exercise (although this charge is similarly levelled at TCA in other asset classes too).
Our consistent – and stubborn position at Cürex – is that TCA is only as good as the data and benchmarks used in the assessment exercise.
FX algorithms have improved considerably over the past few years. We’ve gone from the tired and parochial offering of the TWAP/VWAP variants to an era of smart algos, which can replicate complex trading strategies, switch between passive and aggressive modes of execution, optimally route orders, and react to changing market conditions.
