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Interesting results from recent Tibco-sponsored survey on FX trading practices
In a piece by Jake Thomases in Sell-Side Technology, he notes an overview from a panel of forex practitioners which analyzed the results from a recent Tibco-sponsored survey on FX trading practices. Tibco software confirmed what we already know, that a high percentage of FX traders use algorithms. They surveyed 147 traders, which is a small sample size but still relevant enough to take into account.
Here are some of the findings from the survey:
Of the 47 percent who do so, 81 percent of them use at least some algos designed in-house. Furthermore, the number of traders using algorithms for smart execution of block orders, in the same way that an equities trader might, isn’t nearly as high, suggested James Sinclair, CEO of MarketFactory.
cTrader, which has seen a warm response from clients over the last couple of years has a robust network of algo trading resources to help traders, which does not require any in house help and can all be outsourced. Alexandros Katsaros, PdM at Spotware Systems, explained to LeapRate over the weekend: “Because of the introduction of cBots to cTrader and because of the improved installation and accessibility through cTrader Developer’s Network (ctdn.com) we have seen a great boost in Automated Trading across the cTrader suit. Traders can get help, collaborate, share and download cBots from cTDN.” He goes on to say: “We are excited to see even novice Traders jump into advanced trading technologies. cAlgo our Algorithmic Trading application and cBot creation tool provides traders with an easy to use API built on C# one of the most popular programming languages in the world, eliminating the need for developers and traders to learn any new languages” concluded Mr. Katsaros.
In another observation from the panel, The CME’s Derek Samman, senior managing director of FX, metals, and options solutions, speculates that the term “algorithmic trading” has morphed from its quant-only origins to something referring to any electronic execution. So while 89 percent of CME’s FX business is electronic, it is not necessarily all algorithmic. This is important to note, that over the last decade of the mainstreaming of electronic trading, not to get it confused with algorithmic trading.
Some other notes from the survey of FX practitioners are the following. It was revealed that only 34 percent of respondents are using visualization technology for FX trading behavior like liquidity management and performance monitoring. Finally, the last few years have seen an entry of new FX electronic trading venues trying to disrupt the market, including LMAX, Molten Markets, ParFX, and FastMatch.
The Tibco survey showed a general lack of interest in these rookie entrants. But don’t write them off yet a panel member mentioned. EBS, a major FX player, struggled in the early days too. As the landscape continues to change for FX trading and trading in general it is utmost importance to stay up with the trends in the market to enhance capabilities, this survey helps reveal some of the attitudes prevalent across the 2014 landscape of high end FX trading and how it also corresponds to the development in the retail market.
To read the whole piece in detail, click here.