In other news GFI is set to launch a hybrid voice and screen-based trading platform forFX options in Q3 this year. The move represents an extension of both its voice brokerage and Fenics capabilities.
ForexMatch will allow interbank dealers to enter prices and trade one day to one year at-the-money volatility for currency options, in addition to 25 delta risk reversals and 25 delta butterflies from one month to one year. The service is being rolled out to clients in London and Europe initially and will reach the US and Asia Pacific shortly after, says Sean Kelly, GFI’s new globalhead ofFXoptions.
ForexMatch connects directly to Fenics FX, GFI’s platform for pricing, analysing and managing currency option positions, and uses pricing server technology developed by the Fenics team.
Customers will be able to process orders from execution on ForexMatch to their internal risk management systems via customised straight-through processing. Customers using Fenics for risk management purposes will have a ready made STP solution so they can pass trade details from ForexMatch into Fenics for further analysis, trade confirmation and accounting entries.
ForexMatch is based on GFI’s hybrid brokerage model where dealers can choose between trading entirely on screen or executing the same transaction over the telephone through one of GFI’s brokers. Currently clients trade currency options only through voice brokerage.
However a growing number of traders now prefer to execute more commoditised currency options electronically, leaving the voice brokerage for transactions involving a greater degree of negotiation.
“We’re always looking to better serve our customers through as many avenues as possible. Traders have become more comfortable referring to and trading on screens but many still prefer the choice and the advantage of using both the broker and the screen,” says Kelly.
The launch of ForexMatch will put GFI in closer competition with broker giant Icap, which integrated an FX options trading platform from Volbroker into its currency options business in 2001 to create a consortium combining voice brokered liquidity and an electronic broking platform.
While GFI declines to comment on its competitors it says ForexMatch was built internally to complement its voice brokerage service and emulate the same successful hybrid model that the company has on the credit derivatives side in the form of CreditMatch, which it launched in 2004 (Profit & Loss, October 2004).