Tag: price improvement

price improvement

LMAX Exchange Challenges Conventional Wisdom on TCA

A new white paper released today by LMAX Exchange seeks to offer more in-depth analysis of the cost of trading in FX markets and calls for the creation of “robust, commonly-agreed” transaction cost analysis (TCA) metrics that compare and contrast the differences between executing on firm and last look liquidity.
The paper, TCA and Fair Execution: The Metrics that the FX Industry Must Use, proposes a blueprint for clients to better discern and compare the costs of trading across firm and last look venues and argues that existing TCA metrics fail to capture the nuances and value of firm liquidity.

And Finally…

It’s fairly obvious that, to use a buzzword of the moment, the FX market has operated asymmetrically for most of its history – banks have held sway and, until the advent of the non-bank high frequency market maker, had little competition. It took that challenge, allied to a few conduct issues, to redress the imbalance, but I am wondering if the pendulum – as happens so often in this business – is swinging too far the other way? And if it is swinging, what is driving it?