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Foreign Exchange

FX comment: Greenwich and StreamBase discover nothing new

Breaking news this week: FX trading switches to electronic over phone, while increased electronic FX trading puts new demands on technology.

Perhaps we’re too harsh.

According to a report from Greenwich Associates: “E-trading volumes increased by 7%, suggesting that market participants continue to actively shift volumes to multi-bank and single dealer platforms from other channels.”

Greenwich Associates consultant, Frank Feenstra, offers an illuminating insight into the findings: “We fully expect this trend to continue as electronic trading platforms continue to attract new customers and market participants already experienced in electronic trading allocate increasing amounts of business through electronic systems.”

Meanwhile, complex event processing technology providers StreamBase announced the results of its Trading and technology trends in 2010 study, which saw “over 80 participants”.

Key findings include:

• 10% increase in use of algos for FX trading from 2009 

    - That’s a whole 8 people.

• Over 25% of participants say their current FX aggregation systems needs improvement 

    - 20 people.

• 35% of participants plan to change or add electronic FX venues 

    - 28 people.

• Nearly 50% of participants want to use FX aggregation as the basis for automated trading decisions 

    - That’s nearly 40 people.

Perhaps not the most representative study to be shouting about.

A panel of experts were even drafted in to debate this hot topic, including: Erik Lehtis, president of DynamicFX Consulting; David Poole, COO and principal, ClientKnowledge; Dave Reid, director FX prime brokerage, Citi; Richard Tibbetts, co-founder and chief technology officer, StreamBase.

One participant told StreamBase: “The survey results are in line with our recent report on high frequency trading in FX indicating the increasing demand for adoption of electronic trading.” Was that someone from Greenwich Associates, maybe?

A video of the panel discussion is available at http://www.streambase.com/webinar-fx-trends-roundtable-2010-reg.htm, but after being faced with the hassle of filling in a registration form, we gave up.

Perhaps we aren’t harsh enough.

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