Peer-to-peer FX trading offers buy-side traders more efficient execution

Where access to FX liquidity for the buy side is contingent upon availability of credit supplied by the sell side. That can impact access to best price – and therefore best execution – due to the ties between counterparties, rather than a decision made on the trading desk.

Peer-to-peer trading has been a success in the corporate bond and equity markets where it has enabled buy-side firms to transcend the limits of risk trading by dealers, or to find a better price than was possible through sell-side equity trading. Jay Moore, founder and CEO of FX HedgePool believes this all-to-all model applied across FX instruments in addition to the spot market will help asset managers find best execution for their investors.

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