ETP leader reckons on risk reduction to crack FX market
Flow Traders is confident that the approach that has made it the leading player in the European exchange-traded products (ETP) market can be replicated in FX as it looks to cash in on increased interest in non-bank market makers.
Flow Traders’ financial results for the first half of this year underlined its status as a European ETP powerhouse.
The firm traded €448.7 billion of ETPs between January and June, and while a report published earlier this year by Cboe Europe acknowledges that the number of trades that go unreported makes it difficult to determine the exact value of the market, it is estimated that the Amsterdam-based algorithmic trader handles approximately one third of all exchange-traded fund (ETF) trades in Europe.
Given that for every euro traded in ETFs the firm trades roughly three times that value in assets related to those funds – including FX – it was perhaps inevitable it would turn its attention to currency trading.
Co-CEO Sjoerd Rietberg notes that Flow Traders has just started to provide liquidity in FX in EMEA, and the firm was reluctant to comment on volumes generated from the partnership it announced with MarketFactory in November.
However, if managing risk is the key to success in FX, Flow Traders is well positioned.
The firm has spent considerable time and resources building and refining its trading software to eliminate as much risk as possible.