Mostly… fixed income and cross product eTrading

October 26, 2011

Ball of Confusion (That’s What the World is Today)

Filed under: etrading — John Greenan @ 12:47 pm

Some light relief from the normal postings about electronic trading and suchlike….

People movin’ out
People movin’ in
Why, because of the colour of their skin
Run, run, run, but you sho’ can’t hide
An eye for an eye
A tooth for a tooth
Vote for me, and I’ll set you free
Rap on brother, rap on
Well, the only person talkin’
‘Bout love thy brother is the preacher
And it seems,
Nobody is interested in learnin’
But the teacher
Segregation, determination, demonstration,
Integration, aggravation,
Humiliation, obligation to our nation
Ball of Confusion
That’s what the world is today…

The sale of pills are at an all time high
Young folks walk around with
Their heads in the sky
Cities aflame in the summer time
And, the beat goes on…

Air pollution, revolution, gun control,
Sound of soul
Shootin’ rockets to the moon
Kids growin’ up too soon
Politicians say more taxes will
Solve everything
And the band played on…
So round ‘n’ round ‘n’ round we go
Where the world’s headed, nobody knows
Just a Ball of Confusion
Oh yeah, that’s what the world is today

Fear in the air, tension everywhere
Unemployment rising fast,
The Beatles’ new record’s a gas
And the only safe place to live is
On an Indian reservation
And the band played on…
Eve of destruction, tax deduction
City inspectors, bill collectors
Mod clothes in demand,
Population out of hand
Suicide, too many bills,

Hippies movin’ to the hills
People all over the world, are shoutin’
“End the war”
And the band played on…

Copyright 1970 Jobete Music Company, Inc.

That’s the lyrics for the Temptations song Ball of Confusion (That’s What the World is Today).  You may have heard the song played over one of the scenes in the film “Tropic Thunder”.

Forty one years later everything still seems relevant. Apart from no-one is firing rockets at the moon.

October 14, 2011

Fidessa vs Sungard…the endgame begins?

So, it’s now public information that Citi have signed up with Fidessa to deliver a global solution:

“Fidessa will provide Citi with an order management and distributed low-latency execution platform along with BlueBox, Fidessa’s integrated algorithmic trading engine. The Fidessa solution will also deliver risk management functionality, comprehensive market data and a global order routing service. ”

So, a big bank takes a chance on Fidessa to deliver a comprehensive futures platform.  Citi acquired a lot of people to build up this business and they are looking to deliver something impressive.

So – what  has that got to do with Sungard vs Fidessa?

Well, remember that Fidessa started by using GL Trade gateways to markets until they built up EMMA.  Fidessa built up an equities business and they never really hit the sweet spot in the futures space.

Now they have a top tier client that has publicised this decision.  So, what happens next?  The existing GLTrade client base now sit down and think “hmmm, if Citi can do it, so can I, get Steve Barrow on the phone”.

I really want to quote Sir Winston Churchill here, but I will resist the temptation.

Now, what do Sungard do?  I refer the honourable reader to my post of some moments ago – link here

September 28, 2011

What we’ve got here…is failure to communicate

I went to see a theatre adaptation of the Paul Newman classic “Cool Hand Luke”.  It got me thinking about the speech paraphrased for the title of this post.

Right, so what has that got to do with Fixed Income Trading?

Trading requires a difference of opinion or of time horizon.  If I think a bond is worth 101 and I am happy to hold to maturity and the best bid I can find is 101 then I will hold the bond.  If you think the bond is worth 101 then you will not buy it from me.  In time horizon terms, I may not be able to hold the bond until maturity as I need to fund redemptions from a fund, so I have to accept less than 101. Ok, markets 101 over.

The majority of instutional real money asset managers I have worked with or know about seem to have pretty similar investment models.  And valuation models (or just Bloomberg ALLQ). So you are unlikely to find many trading opportunities among a consensus of valuations – only trades based upon different time horizons.

So – if you were trying to build a bond trading platform in line with then how do you actually get trades?

In a previous post I suggested that the key is RETAIL+INSTITUTIONAL=TRADES!

I think that the real trick here is structural; bear with me.

A retail business will have relationship managers who keep the client relationships going.  They are the people in the driving seat in some ways.  There is a dealing desk which is often seen as an extension of the back office and a cost centre rather than a profit centre.  At the back is a custody operation which one assumes will be making a few pennies from lending out stock in the same way that an institutional custodian will lend stock.

So – if you say to the wealth management dealing desk – put your positions onto the order book at limit prices and employ some kind of maker/taker model such that the desk can generate some PnL then you have a series of heads of desk who would be interested.

So what’s the relevance of the title?  Well, the failure to communicate in this case is that buy-side market participants are so segmented that there are multiple discrete segments.

Retail money is not interacting with institutional money

“Small institutional orders” run through the platforms such as BV, TW, MA, BLP.

“Large institutional orders” are on the telephone

So – if we have a market place (or multiple competing marketplaces) where all sizes of orders can interact in an anonymous fashion then we should see more trading – provided there are enough firms who understand the model and are willing to make the changes to their models and trading behaviour.

In my discussions on this subject I keep echoing the point that the equities markets can – in this specific case – teach the fixed income people a thing or two.  Construction of synthetic order books, smart order routers, partial executions, different order types (not just market or limit), market surveillance, compliance, audit,  exchange memberships and so on are all well trodden paths for the equities world. 

Oh, and if you fancy seeing the play, follow this link

September 16, 2011

Fixed Income trading – exchanges/MTFs/SEFs/same old stuff?

I try and follow what’s going on in the world of Fixed Income trading as much as the next person in the industry who has a related day job.  After a while the whole Dodd-Franks thing starts to make my eyes spin and I need to sit down with a damp cloth on my fevered brow.

Anyway, the question that I am mulling over is what happens next?

On the one side the Fixed Income hub firms are busy rolling out SEFs and looking to put CDS electronic.

On  the other side we see at least four firms trying to push the European cash bond markets onto an exchange-like model – following on from  

The four firms I know of are:

Bondvision MTS – part of the LSE group —

Galaxy – part of TradingScreen

Bondmatch – part of NYSE

Vega-Chi – private firm with a lot of ex-Goldman Sachs guys on the team

All four seem to have similar business models.  But is there demand for the idea of pushing good old fashioned cash settled bonds onto an exchange?

Over the last few years banks have starved their credit desks of capital to the point where most banks will only work an order rather than commit capital.  So if that reading is correct then it would be an efficiency play to disintermediate the sell-side and allow buy-sides to trade against themselves in an anonymous model.  This is a similar model to that of Liquidnet “classic” where real-money buy-sides interact entirely anonymously with Liquidnet giving up all trades to JPMorgan.

But are buy-sides ready?  One analysis is based on three components: systems, people and processes.  Do buy-sides have the three components to do this?  I suggest that many do not.

The critical mass needed for an exchange in this space is not clear – certainly it’s necessary to get multiple participants on the platform but that’s not sufficient.  In order to trade you need differences of opinion in value.  That suggests to me that what is needed are different classes of buy-sides.


If I was starting up one of these exchanges I would approach the big private client businesses and ask them to participate on the platform – to provide limit orders for the book of their inventory.  Allow for multiple small clips on one side of the book to be traded against one big order on the other side in a neat way.  Allow retail and institutional folks to dance on the same platform with protection against stubbed toes…

I would also ask institutions to place limit orders for all of their hard to value/hard to sell inventory.  So many institutions find themselves holding a credit that is traded by one man in a bank in Luxembourg and he’s on paternity leave.  Stick it on the order book and see what happens.  Let’s be realistic – it’s not like you are “showing your hand” anymore than you would be if you phone the Luxembourg bank up for a price – you might find that you don’t get your face ripped off.

Get a few trades done and then you are allowing people to safely dip a toe into the water.  Make sure there is excellent post trade performance and the venue will find more order flow arriving.  It’s not going to turn into a massive amount of liquidity in the way that FTSE100 equity names trade but it will become a self perpetuating virtuous cycle.  The velocity of circulation of bonds will increase as the liquidity is concentrated and prices are published. 

Eventually the platform can move to provide a tap auction / primary listing facility.

If you ever read about Drexel Burnham Lambert and Michael Milken you see that he and that firm were credited with popularising below investment grade or junk bonds.  How?  Simple – he sold bonds and he made a two way secondary market. Investors felt secure that they could sell if needed.  I am not suggesting that the DBL model is one to follow – but the provision of the optionality of a place to sell a position makes folks much more likely to trade in the first place.

And what will the banks do if they see a move to exchange trading for cash bonds?  I know of at least two big banks that have built fixed income “MTF-like” platforms.  I cannot imagine it would be hard for them to kick the tyres, light the fires and go-live with a competitor to the four firms named above.

“Build it and they will come….”

August 15, 2011

Sungard: GLTrade/Brass/Front Arena – what now?

Filed under: etrading, FIX, Nuts and Bolts, OMS / EMS, STP — Tags: , , , , , , , — John Greenan @ 2:37 pm

Bid for Fidessa?  About £588 million market cap at £16/share. Throw on a premium – say 20% to take it to about £700 million.


A double or quits bet on the front office trading systems market.  The GL acquisition cannot be going well; why not scoop up the main competition?  Price earning of about 20.  For year ended 31st December 2010 Fidessa made a £40 million profit. That’s a decent return on equity in a downturn and beats the hell out of a bank account.

Massive synergies possible – basically you just shut down all of GL Trade and Brass and most of Front Arena.  Keep the Clearvision product offering. Integration costs will be high – closing down the Tunisia and Serbia development sites and pretty much all of the Paris based staff.

Do I expect Sungard to do it? 20% chance at best. But if you cannot beat ’em, buy ’em! At the moment Fidessa are eating their lunch on a drip-by-drip basis.  This would be a transformational acqusition in the true sense, since it would transform Sungard from a dying sclerotic business to being Fidessa+a few bits left from the Sungard Trading world.  Just have to make sure that the staff retention packages are enough to keep the Fidessa “magic/inner circle” onboard but not to much to let them get lazy.

Disclosure: I know people at both Fidessa and Sungard, I have not discussed this article with them and have no information other than market knowledge.

June 17, 2011

Trading Technology for the sell side

Filed under: etrading — John Greenan @ 8:41 am

In the current economic climate there seems to be a bit of a slowdown in the sell-side tech space at the application level.  Plenty of action in the move to cloud based applications, plenty of action in the low latency space.  A few firms out there appear to be working on a software and service offering with business models that differ from the usual license fee plus maintenance contract plus professional services model.

Just three of them that I have found out about are listed below

Be interesting to hear of anyone out there with a bit more experience of these firms…

October 21, 2010

What is an order routing hub for?

Filed under: FIX, Nuts and Bolts — John Greenan @ 7:46 am

Had a meeting with some interesting folks a little while back.

 A pet subject of mine came up, data mining based on real traded data.  Among other thin suggested a couple of things

A fuzzy logic based method to match up IOIs, ATs and real trade reports.  Regress them all against each other with appropriate lags and so on and provide a reporting tool to the buy-side to allow a buy side to assess the quality of the IOI based on historical trends.

 Why?  Well who actually looks at IOIs and thinks that they are real?  Same folks who believe in the tooth fairy?  But – the problem is structural.  The only firms who would have this data for a wide enough sample of buy and sell sides would be the order routing hubs.  And who pays their bills? The sell-side.  And who gets beaten up by this idea?  The sell-side.  Turkeys don’t vote for Christmas.   But it’s be fascinating to see the results of the analysis.

Anyone work for an order routing hub and want to comment?

April 7, 2010

eTrading from your iPhone

Filed under: etrading, Nuts and Bolts — holky @ 7:11 am

JP Morgan launch Morgan Direct for iPhone and claim first past the post with an institutional FX trading offering in a native iPhone app. (You can tell it’s institutional, because if you try to register as a private investor it tells you that its only available for institutional clients). Obviously the scope of the app is heavily constrained in terms of compliance and (institutional) client-side controls over what functions can be performed away from the reasonably controlled office environment; but from FX perspective seeing current rates and being able to cancel current orders looks like it is there, as well as the ability to raise new orders. I’d be interested in the uptake of this; is this genuinely a client tool or more of a marketing exercise? ..I guess the answer depends on what type of institutional client we’re talking about..

Looking forward to seeing if the first institutional ipad etrading app will be far more functionally rich. Watching the ipad etrade movie im wondering whether “fat finger” will ultimately be a setting to resize the trading buttons?

Are any of the OMS offering a native iPhone view? Perhaps a big brother compliance/risk view of whats going on to keep an eye on everything while out of the office? Probably an easier adoption route than trading to start…

March 21, 2010

Google eTrading

Filed under: 2015, etrading, FIX, Nuts and Bolts, OMS / EMS — holky @ 9:15 am

With Google hiring the former global head of FX at Bloomberg you can sense the anticipation that this could be the point that Google steps up with a Bloomberg-challenging capital markets offering.

While there is plenty for the market data lovers to expect from this, I wonder where etrading functionality sits in the roadmap, and whether those plans are all d-i-y within Google or whether there are any exploratory conversations going on with guys like marketcetera about creation and distribution possibilities regarding getting that Google OMS going? I know that if I was pushing FPL, I’d be all over Google to ensure FIX is high on Google’s radar as the api of choice for orderflow, as the wave of adoption that would create would be enormous.

March 17, 2010

eTrading is king

Filed under: 2015, etrading, STP — holky @ 6:47 am

No need to talk up your own book if you’re involved in eTrading, EFN summarises the recent Morgan Stanley and Oliver Wyman publication Outlook for Global Wholesale and Investment Banking as specifically very positive from the eTrading front:

Flow Monsters – As spreads narrow and margins tighten, MS and Oliver Wyman are predicting that so-called ‘flow monsters’ with electronic trading platforms, ‘scale, leading edge technology and outstanding risk management in key categories’ will prevail in equities and fixed income trading. In fixed income currencies and commodities (FICC) sales and trading think market leaders Goldman Sachs, Citigroup, JP Morgan, BofA Merrill Lynch, Deutsche and BarCap. In equities sales and trading think Goldman Sachs, Credit Suisse, SocGen, Deutsche, JPMorgan, and Bank of America Merrill Lynch.

also specifically in

Electronic Trading We noted yesterday that anything related to electronic trading is hot (here). MS and Oliver Wyman confirm that the push to cut costs and build volume will ensure that electronic trading remains key in flow businesses for the foreseeable future. As a corollary, they also predict ‘down-skilling’ in other areas, such as flow sales.

and just to touch on the STP/processing side,

Post trade servicing Few people get rich from working in post trade servicing, but it’s definitely a growth area. Banks are predicted to invest heavily in post trade clearing and asset servicing capabilities this year. This is largely to prepare for changes to the OTC derivatives market, where up to 85% of trades are expected to move to centralised clearing systems in the next few years.

February 10, 2010

We’re still not working from home…

Filed under: etrading, Nuts and Bolts — holky @ 9:48 pm

Ah another year on from last snow related post, and its much the same… Tweet from Kevin at Tabb says NY Equity vols are down 15% this morning because of the snow – but it seems regulated functions are still not trusted to work outside of the office? …. also appears that even the less regulated high freq guys managing systems that are turning over big volumes dont have remote control units..

August 27, 2009

Speculative Trading

Filed under: 2015, etrading — holky @ 9:19 am

A Tobin tax is now threatened by Lord Turner, FSA Chairman, to stop ‘excessive’ bonus payments, by reducing opportunities in speculative trading.

Assuming this is intended to be a tax levied on every single fx trade from every participant in the fx market (to penalise speculators from punters through to tier1 banks), and one cant net out any liability (well that would miss the point wouldn’t it), then everybody will need to report every fx trade done in order for this to be fully policed. Whether that reporting is ‘just’ an extension to FSA transaction reporting, or an interesting project for exchanges and trade reporters, it certainly doesn’t sound like its cheap, easy, or quick to implement ..or indeed to police – here presumably needing to audit OTC trades reported against payments in/out of bank accounts; taking into account all nets and splits along the way.

I wonder if the real threat is not a tax on every fx transaction, rather it’s that there would be a dumbed down version that would emerge; something that could be agreed by all states involved, and then implemented within a time frame of a couple of years. Still, think MiFID, with change comes opportunity, and just think of all of the hitherto-unforeseen knock-on effects that could be monetized.

August 24, 2009

Cockney Bankers

Filed under: etrading — holky @ 7:10 pm

Finextra tells us a cash machine operator has introduced Cockney rhyming slang prompts and options to five of its ATMs in east London. Customers choosing the cockney option will be asked to enter their Huckleberry Flynn (PIN) and will then be able to select sausage and mash (cash) amounts such as a speckled hen (£10).

What a lot of old pony … though well be translating the etrading site just in case it catches on. Guvnor.

May 5, 2009

Live the dream

Filed under: 2015, etrading — holky @ 3:33 pm

Ah … i see that WSJ says etrading is defining the activity at NYSE…. so all of the humans on the floor there are having “big lunch” between the electronic activity around the open and close. Crikey – isn’t this getting to be like a pilots job? Alert, sober, and on the case for take off and landing, but otherwise on autopilot for the rest of the journey?

March 25, 2009

Client-client trading

Filed under: etrading — holky @ 8:57 pm

Ah … MarketAxess also looking to get client to client (bidlist) orderflow then …with give up to bank standing as clearer. How much is the execution though …even with some natural crossing the cost could kill it.

Traditionally, MarketAxess allows investors to electronically signal to certain banks they want to execute a trade in any of a range of agency and corporate bonds. In October, however, the platform introduced a facility, known as Market Lists, to allow investors in the U.S. to also signal that interest to each other. MarketAxess’ European customers can already use Market Lists to trade U.S. high-grade corporate bonds with U.S. investors. The company now expects to allow European investors to trade sterling-denominated bonds with each other in late April and floating-rate notes and euro-denominated issues by midyear. Banks aren’t being completely left out of these trades between investors, however, because they have to be routed through banks which then charge a fee for processing the trades.

March 12, 2009

Executable Bid Lists, eh

Filed under: etrading, Nuts and Bolts, OMS / EMS — holky @ 8:12 pm

Is that MarketAxess “Inquiry lists for financial products'” anything like executable bid lists or something like the iois stuff here as previously posted?

February 17, 2009

What lies ahead for e-trading?

Filed under: etrading, Nuts and Bolts, STP — holky @ 7:48 pm

Well, I liked the sentiment of the headline from Icubic “talking their book” (and indeed mine too) via “Electronic Trading: Visibility and Agility in a Fragmented Market”, stating-

With liquidity continuing to decrease, as the financial crisis unfolds further in 2009, it is widely accepted that electronic trading will play a pivotal role in ensuring banks can stay abreast of market developments, capitalise on fleeting opportunities and ultimately retain an advantage in a highly competitive landscape.

…but the Aite group report“The Next Challenge in FX – Creating a New Post-Trade Paradigm in an Electronic Reality” struck a particular chord with me. Yes, this is partly because I’ve been blinkers-on in the end-to-end FX space for the past couple of months and realise how painfully manual everything still is, but it’s also because I’ve always felt the spotlight was always on the execution-related bells-and-whistles arms race, at the expense of the far more more mundane requirements of actually sorting out the operational side of the dramatically increasing levels of trading being done [because the front ends got so much better to use].

We’ve all done plenty to exploit those “fleeting” singledealer opportunities, but perhaps our opportunity now really is to build real STP; the collective, cooperative processing that will move us from the (all Aite quoted) FX ticket price for non-top-100-banks of $10-25, to something that compares far better to per-ticket costs of fixed income $12, futures $1.25, equity options $0.75, and equity $0.05 (… though a question on these; are you really only paying 5c per trade for equity processing? ..processing not including clearing?).

Electronic trading in FX has become the norm, and the emergence of high-frequency trading shops and the burgeoning retail market have driven trading volumes into uncharted territories. However, beyond the front office, where most of the innovations have taken place over the last decade, cracks are appearing that might derail the growth of the FX market in the long run. Growing trading volume has had a negative impact on the back-office, post-trade infrastructure of most active FX firms. Today, FX has one of the highest processing cost structures when compared to other popular financial instruments. Industry-wide efforts aimed at easing the post-trade challenge have been met with limited success due to the lack of both coordination and an overarching strategy.

Sure, old habits will die hard – banks still obviously seeking competitive edge will continue to focus on helping their customers trade with them rather than their competitors, full stop. But perhaps the bigger picture is to build those collaborative foundations that will help enable more of your customers to trade more, and do so more frequently, in turn gaining even more value from those wonderful tools you’re offering? .. So shouldn’t we all collectively create the wave first, then we can have the competitive surfing competition once buyside and sellside are at the beach and ready to enjoy it?

Million Dollar Traders

Filed under: etrading — holky @ 7:36 pm

I watched, heck even enjoyed the Million Dollar Traders programme on BBC. And yes, this IS a timely post, it’s lined up for the inevitable repeat 😉

Eight ordinary people are given a million dollars, a fortnight of intensive training and two months to run their own hedge fund. Can they make a killing?

….a killing, er, not in terms of the whole firm with “one m-e-e-e-l-y-o-n dollars” between eight and (apparent) constraints being small stock trades (eg 400 british gas, 100 nike?) with voice broking and a ticket stamp machine for dramatic effect. Think even while keeping setup costs to a min though they could have been given etrading and order routing via their Bloombergs though; gaining all sorts of potential for fat fingers and “click – pause – ahaaaa – wheres undo?”

February 3, 2009

Reuters/Bloomberg IM

Filed under: etrading, Nuts and Bolts — holky @ 8:46 am

Finextra tells us that Reuters have launched cross platform Instant Messaging, linking their RM community with/into the big wide world. (I should have said finally in that sentence – we were talking to them in some detail about this sort of thing over 3 years ago).

Reuters Messaging (RM) Interchange is being billed as a global instant messaging hub, connecting Thomson Reuters RM with Cisco’s Jabber XCP, IBM Lotus’ Sametime and Microsoft’s LCS/OCS. Users connected to the hub will be listed on an inter-company community directory.

Does an inter-company community directory that (somewhat) validates each user @ their particular firm is who they claim now present a credible challenge Bloomberg messaging? … and given the more open nature of this offering, should we expect quicker development of conversational e-trading functionality?

February 2, 2009

Working from home?

Filed under: Nuts and Bolts — holky @ 3:58 pm

Given the logistics problems the snow is bringing I thought I’d pose a question; how many of your traders are a) allowed to, and b) able to , work from home? Previously there have always been problems with the regulated roles doing their regulated work out of the [watchful eye of the] office, but I wondered if any firms were activly removing these hurdles in particular clever ways in order to support this. And does that give them an advantage on days like these?

November 25, 2008

Behavioural/Operational Data

Filed under: etrading, Nuts and Bolts, STP — holky @ 6:11 am

As quoted here

UK credit card issuers have agreed a framework for sharing ‘behavioural data’ on their customers’ accounts as part of an initiative to meet political demands for responsible lending practices.

Is anyone yet extending this sort of analysis onto operational flows – to record and use the institutional behavioural data (STP rates, blame attributed fails, etc) in establishing a true(r) transactional cost of trading with the client in question for the product in question? …. then using that contextual info as one of the inputs to their pricing engine / SOR ?

November 10, 2008

Get Those Humans Back!

Filed under: 2015, etrading, Nuts and Bolts — holky @ 6:28 pm

EFN tells us that humans are back in vogue…

Wild swings in global stock markets and unprecedented volatility are luring buyside and sellside traders back to the personal touch broking model, where they can find an experienced broker on the end of the phone. Electronic trading remains a high priority, but the human element may be the key to brokers gaining business.

Do you think this is indicative that e-trading technology still isn’t “good enough” to merit the trust of the customers wishing to trade? In which case what function is missing? Based on that article, it’s some sort of reassurance screen/popup; “yes that looks like a very sound trade, pretty much in-keeping with what were seeing, so please click OK to invest wisely”. Ok, that’s an exaggerated thought, but surely a colour/context check could be part of an automated negotiation/orderflow?

November 3, 2008

Tradeweb Changing Shape

Filed under: 2015, etrading — holky @ 8:57 pm

Tradeweb’s vision – where markets meet;

To be the first network to offer insitutional clients trading from ONE platform, with ONE ticket, in ANY asset class, in ANY currency, anywhere in the world.

A great aim – but clearly not enough to keep them busy. Today we hear that Tradeweb also plans to launch an electronic inter-dealer platform (for pass-through mortgage-backed securities in early 2009 part of their purchase of Hilliard Farber’s interdealer business). I wonder how much appetite (within TW & the dealer shareholders) there is to extend the interdealer product set?

Well, even though Tradeweb clearly has many irons in many fires, and shipping (/cargo) is something ICAP have mentioned with a degree of excitement, I don’t think this Tradeweb trademarked product will actually be related (odd about the trademark though) …

Tradeweb ™ streamlines the cargo declaration process by enabling users to send declarations to the Singapore Customs, IE Singapore, and other controlling agencies directly from the computer

…unless you know different?

October 16, 2008

Clearing is the new black – but nobody cares

Filed under: Client Onboarding, etrading, Nuts and Bolts, STP — holky @ 6:39 pm

Finextra reports the latest exchange looking at the OTC markets – lch.clearnet eyeing up the FX market to work out how they can get clearing involvement.

This is just days after the news confirming fxmarketspace is being closed down (by CME and Reuters) because there was not enough activity on the platform.

Given everyone’s fear of counterparty risk at this point, you’d think the timing cannot get much better for offering centralised clearing for OTC products. So why is it so difficult to onboard clients to these offerings? I can’t believe its just a documentation hurdle – sure the lawyers are probably quite busy with one thing or another at this point, but surely any business/risk manager looking to be a hero would have legal review and signing way up their todo list.

So what’s missing from the pitch?

September 17, 2008

More venues than banks..

Filed under: 2015, etrading — holky @ 12:05 pm

A crap week for those in the investment banking space, but should we expect a wave of closure of liquidity venues to hit the headlines shortly? If a third of banks need to dissappear in order to cleanse and rejuvenate the market, surely we are at risk of ending up with more venues than there are liquidity providers to adequately support them? …albeit you could argue were in that space now given a lack of liquidity already.

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