The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Foreign Exchange

Electronic trading systems: The end of the machines

Ultimately, reports of their demise will prove premature. But the extraordinary volatility seen in FX over the past few weeks has highlighted some issues with the machines, or electronic trading systems as they are more properly known.

I have received numerous reports about the poor liquidity on various ECNs, and several of the leading banks have been extremely inconsistent in their pricing. Of course, they are fully entitled to adjust their spreads to the prevailing market conditions, but from what I hear and see, many of the alternative trading venues, such as Oanda and Saxo, are consistently quoting better prices.

I have also received lots of propaganda about the merits of various business models. Those who have effectively agency businesses are telling me that the market has shown the worth of their offering, as it is too volatile for smaller outfits to warehouse the risk they are having to take. Those who run principal models tell me that the banks themselves are shying away from the market, and their clients are only getting the prices they do because of their appetite to hold positions.

As for the banks, they are struggling to get orders done. An old colleague of mine says that I may have seen similar movements back in the day, but now there is no liquidity. Programmed risk management is all very well, but, to put it bluntly, programs don’t have balls, so prices are being chased to get orders filled.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree