The second – and penultimate – Irrational of 2019 is the Event of the Year and obviously this had to be held back to ensure that the Great British public did not don their subversive hats again and surprise at last week’s election. They did not to any great degree (although I don’t recall a […]
Tag: market impact
I am writing this sitting in a US airport awaiting my flight home – that airport is JFK in New York and, thanks to a short delay, I cannot help but think that just a few years ago it was here that Mark Johnson was arrested and commenced a period of hell that few, if […]
There is still so much “spin” around liquidity, for as we have noted in our In the FICC of It podcast, while the platforms and liquidity providers would have us believe there is no problem, the occasional flash move and, more pertinently I would argue, survey results indicating liquidity remains a very high concern for clients […]
Speakers at the Profit & Loss Forex Network New York event highlighted that how you define, measure and respond to market impact when trading FX depends on a number of different variables. Opening the discussion ‘Market Impact – Finding Execution Styles that Work’ moderator Paul Aston, the CEO of Tixall Global Advisors, argued that while […]
In the wake of the GFC and the allegations of misconduct aimed at institutions and individuals, the buzz word was ‘transparency’ – the word from market participants was that they were going to be transparent about everything, meanwhile regulators everywhere made a sustained push for absolute transparency in markets.
The thing is, in FX terms especially, it hasn’t worked – I am not convinced it has in any market actually – and market participants are showing this in where they put their business.
This column comes with a warning as I am getting increasingly grumpy with attitudes to FX market price action. You clearly can’t please everyone, but how can someone complain – as they did to me this week – that what we have seen in sterling this week was “the wrong kind of volatility”? Luckily I have this column to let off steam so let’s do that – with a take down of the model that has turned FX traders into glorified brokers.
Information leakage is the new “issue” in foreign exchange markets for many players (actually its just signalling risk renamed surely), and for several participants it is a question of their past catching up with them in how the LPs are not willing to help them anymore. For others, however, it is a genuine issue, but I am not sure how easy it is to solve given how everything we do online leaves a digital signature – and trading in no different.
There is a changing dynamic afoot when it comes to relationships between service providers and clients in the foreign exchange industry, one driven partly by liquidity providers developing a better understanding of the value of their clients’ flow and partly by clients seeking to optimise their execution – specifically by reducing market impact. Colin Lambert talks to Roel Oomen, managing director, e-FX spot trading at Deutsche Bank, about his latest research paper that advances the study of optimal liquidity aggregation via a data driven analysis of price signatures.
This will be brief, it being a public holiday here in Australia (happy birthday Liz!) – and on the subject of the aforementioned Queen Elizabeth II, my congratulations to former RBC and State Street FX stalwart as well as former ACI president Marshall Bailey for his OBE (to financial services and charity).
That’s as nice as it gets today, because I need to talk about that most polemic of men, the US president and his irresponsible, but not out of character, leaking of the employment data.
I was not surprised to hear that another two FX platform providers are working on the delivery of a mid-market matching, or ‘dark’ mechanism to add to their suite of services. Inevitably given the (apparent) success of BGC’s dark pool MidFX, this is an avenue that they should explore. Given that nothing is launched without extensive customer feedback, one has to assume this is client driven, but that begs the question. If customers like ‘dark’ trading, why has there been no serious challenge to BGC?