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What Do Clients Want From Their Liquidity Providers?

What Do Clients Want From Their Liquidity Providers?


Shortly after Citadel Securities won the Best Market Maker in Major Currencies category at Profit & Loss’ The FoXys Reader’s Choice Awards, Kevin Kimmel, global head of e-FX at Citadel Securities, sat down to discuss what firms want from a modern liquidity provider.

“I think it’s important for market makers to customise their liquidity to each individual consumer,” says Kimmel. 

Although he acknowledges that “market impact” has become something of an industry buzzword recently, Kimmel maintains that there truly is a large segment of the liquidity consumer universe that is looking to trade with firms that are willing to warehouse risk because it will help minimise their market impact. There is also though, he says, clients that are much more aggressive in accessing the market that just want tight prices and a high fill rate.

“So one of the most important things we look to do is take each client relationship separately and look at it from a partnership perspective and see what’s most important to them and how can we deliver what they need,” Kimmel adds.

He also stresses the importance of reliability – particularly during volatile trading periods – as a key attribute of a liquidity provider in today’s FX market.

“It’s easy to show a tight spread in a very calm market but it’s another thing to be there when the going gets tough. So we found a lot of our clients being highly appreciative over Brexit when we stepped up and did a lot of volume because some of that other liquidity pulled back and that helps strengthen the relationship,” says Kimmel.

You can watch the full interview here: