After raising capital from its founding banks, FXSpotStream (FSS) has added functionality to support FX Algos and Allocations over its API. Now live with multiple clients, this is the industry’s first multi-bank service FX Algo API and provides access to the entire Algo suite of its Liquidity Providing banks (LPs).
FXSpotStream was created in 2011 as a market utility to reduce the costs of trading FX as the electronification of the FX Market continued to accelerate. Originally supporting only FX Spot, the Service has grown considerably since its formation and now supports trading in FX Spot, Swaps, Forwards, NDF/NDS and Precious Metals Spot and Swaps.
Clients pay nothing to access liquidity from up to 15 tier 1 LPs via a single API or GUI from sites in London, New York, and Tokyo, with no brokerage, data or hosting fees. LPs are charged a flat fee for the core streaming offering to trade an unlimited amount of volume, resulting in the LPs paying less on a per million basis as their volume grows; thus, clients can expect better pricing from the LPs.
FX ALGORITHMIC TRADING
The automation of the foreign exchange market has seen a strong shift from its roots of telephone trading, voice desks and opaque price information, to today’s technological world with online trading and streaming of prices. Algorithmic trading is one area of the FX market that has seen significant growth and today algorithmic trading accounts for approximately 30% of all institutional foreign exchange trading volume and over half of all equity trading volume.
FXSpotStream provides clients with access to over 70 different algos and 200+ algo parameters supported by the LPs, all over its API. FSS is targeting a gap in the market and giving clients wider access to liquidity while reducing the risk of information leakage. Clients can choose a specific liquidity profile with the ability to execute against the bank’s liquidity alone or a variation of the bank’s full offering.
The algos supported by FSS include spot, NDFs and forwards. Following the launch of the algo functionality over the API, algos are targeted to be available over the GUI in Q1 of next year.
FXSpotStream has also added functionality to support FX Allocations over its API. The combination of the algo functionality with the support for allocations will appeal to hedge funds, asset managers, multinational corporations and regional banks. Ultimately any client with an interest in accessing the algo suite of a Tier 1 provider or needing allocation functionality will be able to utilize the FSS offering.
Though Pre-Trade Allocations are generally executed in the RFQ protocol, FSS will support this for full amount ESP orders. Post-Trade Allocations will be limited to those clients pre-approved by their LPs. Allocations can either be implemented by the client or through an OMS or third-party vendor. EG