Are we undergoing a sea change in the FX trading landscape? I suspect we are but the direction in which change is heading will be familiar to those of a certain generation. Over the past few months I have had many conversations with FX traders about market conditions and while there is a fair bit […]
Tag: Market makers
Thursday’s column provided a steady stream of comments and feedback with one question over-riding all others – what can be done to avert more flash events, especially in the Australasian window before the mainland Asia open?
I actually think the question should be, ‘what, if anything, should be done?’ because I remain unconvinced that what happened last week requires a radical rethink of how the FX market operates. This may come as a surprise to long-standing readers who may recall me advocating for the use of central bank volatility bands post-sterling flash crash, but the two events are different.
Noble Bank International recently launched with a new business model aimed at alleviating the current credit constraints in the FX market. Will it be a “game changer” for the industry? Galen Stops takes a look.
If every new product or service launch that claimed to be “game changing” actually was, the FX industry would be a dizzying place to work in, such is the popularity of this phrase and its variant forms.
As a result, it was hardly surprising to see Noble Bank International (Noble) hail its new real-time, post-trade FX service as “industry changing”, when its official launch was announced last month. And yet, if the Noble model manages to gain significant traction within the FX industry, it could have a significant impact on how the market operates.
Monday’s column touched a nerve with its criticism of market makers that quote ridiculously large spreads. Of course, we should also question the quality of controls at a participant that allows someone (or something) to hit a big 35 big figures below the last price.
Going back to market makers though, perhaps we need, using the execution quality analytics now available, to start naming and shaming the worst offenders? I personally have no problem with this and I think I would have quite a bit of support.