The move away from fixed physical infrastructure is being furthered by British FX, CFD and spread betting company CMC Markets with inception of FX liquidity aggregation on the cloud
According to smartTrade Technologies, the decision was made by CMC Markets to opt for LiquidityFX, the company’s enterprise trading solution for FX, Swaps, NDF and Precious Metals built on smartTrade’s proven liquidity management platform, as a result of its cloud-based format which facilitates global co-location with liquidity providers.
smartTrade Technologies does not charge a brokerage fee, which CMC Markets also considered a deciding factor.
Whilst Liquidity FX accommodates the current requirement for cloud-hosted systems, smartTrade Technologies’ experience in producing liquidity management systems dates back some fifteen years, with its product range focusing on enabling banks to develop multi-asset dealing platforms which aggregate liquidity to a single order book.
In this particular application, by adding the aggregation and intelligent smart order routing capability of LiquidityFX, CMC Markets is expected to benefit from true direct market access to selected Liquidity Providers and ECNs, without the spread distorting impact of liquidity fees (smartTrade does not charge Liquidity Providers). Spread distortion and widening is becoming a moot point among experienced traders, especially those using algorithms, as it is often possible that spread widening during news announcements can be a matter of concern for such traders, especially when using a direct market access brokerage.
It is not uncommon for some brokers to b-book trades during news announcements and times of volatility in order to maintain very low spreads, however the model being utilized by smartTrade Technologies eradicates the need for such practice and therefore will assist brokerages to operate a solely a-book order flow, with varying spreads which are not punitive to traders.
CMC Markets’ traders can trade in a fully disclosed bilateral manner through the LiquidityFX API or UI, with a range of passive or aggressive order types. smartTrade’s solutions are proven to both enhance hit ratios and reduce execution latency, thus enhancing efficiency and revenue of CMC Markets’ trading activity.
Hosted in Equinix’s data centres in New York, Tokyo and London, LiquidityFX drastically reduces time-to-market to roll out a sophisticated FX trading system. smartTrade’s cloud based offering enables banks and brokers to control IT expenditure, thanks to both the flat fee structure and the outsourcing of maintenance to a dedicated smartTrade’s 24/7 global support team.
Greg Niebank, Group Head of Product at CMC Markets today made a corporate statement that, “We have seen tighter spreads and improved fill ratios thanks to the no brokerage fee model offered by smartTrade and the benefit of being cross-connected to our liquidity providers. Additionally, the smartTrade solution has significantly simplified our infrastructure, allowing us to respond to changes in the market environment much more quickly.
David Vincent, Chief Executive Officer of smartTrade Technologies added: “smartTrade is a pioneer in transparent technology with volume agnostic fees and a wide range of innovative functionality to offer both traders and their clients alike. We are very pleased to support CMC Markets in growing their FX and precious metals trading activity by using our best of breed technology. Our easy-to-use trading front-ends and APIs allowed them to be up and running in weeks , giving CMC Markets an important step ahead in the FX market. We look forward to accompanying CMC Markets in its growth.”