Digital Vega went live this week with its new trading platform Medusa. It is, the firm says, the first dedicated multi-bank FX options platform and is being rolled out across global asset managers, corporates, hedge funds and regional banks.
As options are almost certain to be pushed onto exchanges or swap execution facilities, Medusa ticks a lot of boxes (when not turning people to stone). The CFTC defines SEFs as: “A facility, trading system or platform in which multiple participants have the ability to execute or trade ‘swaps’ by accepting bids and offers made by other participants that are open to multiple participants in the facility or system, through any means of interstate commerce”.
So if Digital Vega were to chase that SEF status, it would put Medusa in a highly advantageous and profitable position. CEO Mark Suter says: “We believe that the Medusa model, as a scalable multi-bank RFQ system, will be suited to the SEF paradigm.”
Medusa will be supported by 10 of the largest FX banks and allows market participants to trade a range of FX option structures on prices from up to five relationship-based liquidity providers. It offers a graphic user interface that can operate through any browser or via API. Pricing is available in either premium or volatility terms, with or without delta hedge, with real time execution and confirmation. It also offers reporting tools to both buy- and sell-side and is integrated with the Traiana Harmony network.
Suter says: “In a market environment where users increasingly require multiple, comparable quotes under fiduciary regimes, we believe Medusa is a real step forward and will set new market standards in FX option trading. We anticipate many market participants who are looking to benefit from simplicity, transparency and liquidity in their trading, coming onboard in the coming weeks.”
Digital Vega says currency risk managers Pareto Investment Management undertook the first transactions.
