Foreign Exchange 2019
The year more buy-side traders use FX trading algorithms
Kristian Karppi, MD, K&K Global Consulting
K&KGC has completed another year of FX algo trading
benchmark research and we can now verify that most
FX traders are still contemplating using them. Our latest
2019 iteration of the Buy-side Perspectives report is now
very detailed and the results is a must have for anyone
evaluating whether to start using FX trading algorithms.
One buy side mentioned that on measuring algo vs. voice
trading performance, trading algorithms generally offer
better results. At certain points of time and specific trade
sizes, voice trades will perform better. Both trading methods
are needed in the foreign exchange trader's tool-box.
It is interesting to see how the buy side’s preferences for
alternative trading technologies, which are being evaluated
for future use, is transforming.
The buy side also discussed the viability for buy-side-to-buy-
side trading for Spot and Derivatives and what benchmarks
would be used for these. The need is stronger for Forwards
than Spot.
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FX Forwards are still cheaper to trade compared to Futures
but the buy side foresee more Futures trading in 2 years
time.
Similar to other asset class trading desks, order automation
is high up on the agenda and most trading desks attending
the ATF Foreign Exchange debates in London anticipate
having automation in place by 2020.
There are also an increasing number of buy side who are
starting to trade FX with various electronic market makers.
To learn more about the topics discussed, please join
us at the next ATF Foreign Exchange meeting in the
Autumn. Based on demand from our buy-side community
in Germany, we will host our first FX and cross asset
derivatives Alpha Trader Forum debate in Frankfurt in
November.
We look forward to seeing you in the autumn in either
Frankfurt or London.
www.buysideintel.com
Summer 2019