FX: Pragma unleashes algo traders on NDF market
The non-deliverable forward (NDF) market has been among the fastest growing corners of the FX market, as investors looking for yield increasingly turn their attention to emerging market (EM) currencies. Now, with Pragma’s algo-trading clients joining the party, liquidity could be set to surge even higher.
Pragma, the multi-asset quantitative trading technology provider, has added NDFs to its algorithmic trading platform,Pragma360.
It allows Pragma’s clients to use algos to trade the Brazilian real, Korean won, Indian rupee, Philippine peso, Indonesian rupiah, Malaysian ringgit, Taiwan dollar, Colombian peso and Chilean peso – all frequently traded NDFs.
They can be traded with Pragma’s time-weighted average price (TWAP), volume-weighted average price (VWAP), percentage of historical volume (POHV) and strike algorithms.
Among the NDFs included, the real, won and rupee are the most actively traded globally, between them accounting for just under half (49%) of global NDF turnover.
David Mechner, CEO of Pragma Securities, says the move brings the same high level control and transparency clients enjoy with G10 currencies on Pragma360 to a wider range of currencies.
“This will be increasingly important in light of the upcoming FX global code, which demands greater transparency and best practices in foreign exchange,” he says.
The move has been made possible by the increasing migration of trading activity onto electronic channels.
Curtis Pfeiffer, chief business officer at Pragma, says: “NDFs were a natural next step for us.