Interdealer broker GFI is in the process of adding non-deliverable forward contracts to its ForexMatch automated trading platform. All emerging markets currencies that GFI currently brokers will be available including Eastern European, Latin American and Asian.
Evgeni Mitkov, electronic trading manager at GFI, says the firm started with options on ForexMatch in Q3, 2006, and then went on to add NDFs. “We have gone somewhat in reverse, adding options on ForexMatch first, which went very well, then said ‘let’s do NDFs’. The demand was there from the banks,” he explains.
GFI is currently in the process of rolling out NDFs, and expects the first trades to occur in August. Existing ForexMatch users can see the NDFs onscreen now on a view-only basis.
“ForexMatch technology is very flexible, and lends itself to making the necessary tweaks to add things like NDFs easily,” Mitkov says. “We have just finished the back end with ticket creation and a blotter so that there is STP into a bank’s systems. Rollout is easy, as the client only has to log in as usual and NDFs will be there on ForexMatch.”
Because of the big uptake in options, in emerging markets especially, GFI says it sometimes sees more electronic liquidity in the emerging markets than in the G10 currencies on ForexMatch. Emerging markets traders may prefer electronic trading, as language can be a barrier in traditional voice trading. Mitkov says: “They are a lot more comfortable clicking on a number because in the heat of battle they could make a mistake when voice trading. They are also seeing the platform as way to expand their exposure to the global market.”