CTAs: Feeling the Heat

2018 saw CTAs cap a generally poor decade of performance with a particularly bad year of losses. Given this, Galen Stops takes a look at whether the rationale for investors including CTA strategies in their portfolio is still valid. Post financial crisis, CTAs have struggled to produce returns, with only 2010 and 2014 standing out […]
Read More »

A Closer Look At: A New Way to Trade FX

Goldman Sach’s David Wilkins, global head of e-FX sales, and Ralf Donner, head of client FX algo execution, talk about a new algo launch that they claim offers a new way to trade FX. Profit & Loss: So tell us about the new algo that you recently made available to your clients. David Wilkins: It’s […]
Read More »

Trading Firms Cry “Last Look” in the Futures Market

As a futures exchange proposes a new speed bump mechanism, a number of market participants are coming out in opposition to it. Some of the arguments they’re making will sound familiar to those in the FX markets, says Galen Stops. On February 1 the Intercontinental Exchange (ICE) put the cat amongst the proverbial pigeons by […]
Read More »

A Closer Look At: Deploying e-FX Tools in Emerging Markets

Yi Hahn Chin, MD and regional head of e-FX solutions – corporates, EMEA at Citi, talks about the most recent regional rollout of the bank’s e-FX platform for corporates, and the broader challenges associated with deploying this technology in emerging markets. Profit & Loss: Talk me through the roll out of Pulse in Nigeria – […]
Read More »

Flow Traders: Standing Out from the Crowd

Robbert Sijbrandij, head of FX at Flow Traders, talks to Galen Stops about why he thinks there’s still room for more non-bank liquidity providers in the FX market.Dutch proprietary trading firm, Flow Traders, has spent the past two years building out its FX business line. The firm trades in the region of €750- €800 billion of ETFs per year, of which roughly two-thirds has an FX angle, meaning that Flow Traders was already doing in the region of €2-3 billion of FX on a busy day before they decided to become a liquidity maker in FX.
Read More »

FX: Going Back to its Roots?

Much has been made of the struggles of speculators to make money in FX in recent years. Colin Lambert takes a look at data that suggests speculators are on the decline, and hedgers on the rise – and he sees some good news for the banks in this, if they can stay one particular course. Spot FX is “over-broked” to use the market vernacular – there are so many market makers, many of whom are recycling liquidity, that differentiating oneself in this market is extremely difficult unless you are either at the very quick end of the spectrum or are handling plenty of large tickets that require care around the execution.
Read More »

BNY Mellon Takes the Next Step in Its FX Build-Out

Key to the announcement made today by BNY Mellon that it is launching an FX options desk is that the bank believes that this represents the next step in its transition to a “full-service” FX franchise. “We’re transitioning from a custody FX business to a more traditional full-service FX provider,” Adam Vos, global head of FX at BNY Mellon Markets, tells Profit & Loss. “As such, FX options was a key deliverable along this journey because it means that we can now meet more of our client’s trading and hedging demands. It’s very important that they no longer have to go somewhere else for this activity, they can trade options - as well as other products – directly with us.”
Read More »

Five Theories About Why Crypto Prices Keep Trending Down

At the start of 2017, a single bitcoin was valued at less than $1,000, yet by mid-December it had almost hit $20,000. Investors were pouring into the space, Initial Coin Offerings (ICOs) were being launched left, right and centre and - given the limited supply of bitcoins that can ever exist - some market commentators were making wild predictions about how high the value of this asset would ultimately go. But despite starting the year at around the $15,000 mark, the price of bitcoin has fallen to $6,671 at the time of writing and other major cryptocurrencies have suffered a similar decline. So what went wrong?
Read More »

CTAs Look Towards Crypto Trading

Thus far, despite the hype and excitement around cryptocurrencies, most CTAs haven’t exactly been in a rush to start trading these assets. However, as Galen Stops reports, this might be about to change. As Cboe and CME both prepared to launch bitcoin futures contracts in December 2017, the price of a single bitcoin roared upwards to peak at over $19,000. For retail investors, the attraction of this particular cryptocurrency was that the price had been going up all year, having traded at around $985 per bitcoin in January of last year. For professional traders, the attraction of bitcoin was that it was an asset that was actually moving, it was uncorrelated to other assets and therefore offered diversification benefits and, on top of all this, was almost exclusively being traded by retail punters.
Read More »

CME and NEX: Building the Supermarket

If there’s one thing that has become abundantly clear over the past few years, it is that many OTC platforms have decided that they need to scale their businesses up and out in order to be successful in today’s FX market. This was made abundantly clear in a press call today when Terry Duffy and Michael Spencer, respectively the CEOs of CME Group and NEX Group, talked about the logic behind their $5.4 billion tie-up. “Effectively, what we’re building is a bigger supermarket,” said Spencer. “Why do people shop in supermarkets? Because it’s convenient to buy everything in one place.”
Read More »