P&L Report Card: This award remains about information and interaction. Traders
need more information than ever before and they need it in an
easy to read format, preferably on the same desktop (or mobile
device) as their pricing. They also need excellent analytics, because
their decision-making process has to be as informed as it can be if
they are to succeed in what remain tricky, event-driven markets.
This means a clean dealing tile – the origins of this award –
remains important for GUI traders, and we would highlight that GUI
traders typically offer better value to a provider bank than a fully
It equally means interactive execution tools,
backed up by great analytics.
Previously we have noted the challenge of having traders use algo
execution tools that only require the metaphorical push of a button
and patience while the algo does its thing. Such a model inevitably
leads to a tap on the shoulder because the trader is not offering too
much in the way of value add.
Where the skill of the trader can be shown is in choice of strategy,
and, if possible, the ability to interrupt or change the path of the
algo during execution.This means a provider must have a wide
range of strategies, at least some of which should be interactive.
Historically, the major banks have offered this ability and over the
past year BNP Paribas, which very much went the way of the agency
model, added a strategy that allows users to interact.
Another area important for traders is gamma trading, and this
functionality has grown in popularity over the past two years,
pioneered by the Royal Bank of Scotland. Since then it has been
taken up by banks such as Goldman Sachs, BNP Paribas and Credit
Suisse, others will inevitably follow.
Another factor we feel needs to be judged here is the ease with
which a client can access information across asset classes – whilst
accepting that correlations come and go, one thing that remains
constant is that correlations in some shape or form, will continue
to exist across FX and other asset classes. As such, the quality of
the data and the analytical tools provided can be a differentiator.
Winner – Morgan Stanley
The crucial factor when talking about traders, especially those using
manual processes, is bringing them up to speed on execution –
and this is where Morgan Stanley has done so much good work.
Yes, information is king in the markets and Matrix, with its
excellent content delivery and analytics was always going to score
well in this category. The bank has also – importantly for the manual
trader in particular – reduced the amount of “flicker” on its screen.
It has also added a day’s range graph to its dealing tile with the
volume traded at each level.
The differentiator, however, remains Morgan Stanley’s analytics,
and the virtual and physical keyboards.
The analytics, as we have noted in the innovation award are
superb, being sharp, easy to understand and very intuitive. We
continue to stress that graphical representation will prove more
popular than data tables when it comes to analysis, and pre-trade
TCA is no different – it can provide an instant, easy-to-understand,
view of the market that all traders require.
Last year we noted the importance of the launch of the Virtual
his product ensures the manual trader remains an
important part of the FX market’s eco-system by empowering them,
especially around the critical events. In the last year, the bank has
released its physical keyboard, which offers the same function but – as
it says on the tin – on a keyboard. Using function keys, manual traders
can execute pre-loaded strategies in up to four markets. They are also
able to trigger correlated orders; for example, if commodities markets
move in a particular direction, then execute the pre-arranged FX strategy.
It has been a tough few years for traders in the FX market with
high frequency, tech-savvy market makers taking advantage of low
volatility in markets.
Volatility is rising, as is the number of events
we are witnessing and this balances the playing field a little back
towards the manual trader.
It is in this environment that Morgan Stanley offers a truly standout
solution for those manual traders – one that could ensure they
remain a key element of the market for years to come