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FX trading technology survey shows traders prefer single v. multi-dealer platforms

Tibco Streambase’s ‘2014 FX Trading Technology Survey’ of some 147 respondents actively engaged in FX trading, of which 63% were buy-side and 38% being sell-side found that:

  • share of FX participants trading electronically remained steady at 80%
  • traders prefer executing on SDP to MDP
  • expectation that bilateral relationship pricing from liquidity providers enhances execution quality
  • fragmentation driving more firms to add more liquidity providers via aggregation services.

Single Dealer Platforms usage

The top bank SDPs were:

  • Barclay’s (42%)
  • Deutsche (40%)
  • Citi (38%).

There were marked difference between buy and sell side firms for the top three SDPs. Whilst buy-side firms preferences are pretty evenly divided, the sell-side much prefers Citi:

Source & Copyright©2014 - Tibco Streambase

 

Multi-Dealer Platforms usage

Curiously, the survey did not find any usage of 360T. The survey found that Bloomberg was the most popular MDP for all respondents, followed by FXall then Reuters and Currenex as shown below. This same order also held true for Sell-Side firms. Whilst for buy-side firms Currenex was ranked 3rd place, with Reuters dropping to joint 5th place along with CME Group.

Source & Copyright©2014 - Tibco Streambase

Currency pair coverage for corporates

CTMfile research found that, the number of currency pairs supported by the main auto-trading platforms used by corporates is follows:

  • 360T - 260+ currency pairs on the platform
  • Bloomberg - FXGO platform has processed 700+ currency pairs YTD in 2014
  • Currenex - 120+ currency pairs
  • FXall - over 600 different currency pairs in Q2 2014 executed trades.

CTMfile take: The Tibco survey respondents are probably mainly financial organisations, but does the preference for single dealer platforms indicate that corporates are losing out by mainly using the multi-dealer platforms?

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