Currency Options have generally been instruments the more experienced trader uses, with complex pricing structures, trading strategies and general understanding of the product. They make up around 10% of FX volumes (USA) and are starting to find a whole new breed of traders ready to add them to their trading portfolios.
On exchange options have traditionally been traded on floors however major exchanges like CME, CBOE & ISE have invested heavily in electronic trading platforms offering FX Options. The OTC market has been slow to respond and only a few prominent platforms are available, FX Bridge has been offering real-time spot, CFD, and options trading in the same account. Giving both traders and brokers advanced risk management tools to support their trading.
Société Générale has signed up to provide FX options liquidity to banks and brokers through US-based trading platform provider FX Bridge Technologies. The French bank is integrating its systems with FX Bridge, and is expected to go live later this year.
“We welcome Société Générale as a liquidity provider to our global broker clientele. The availability of multibank liquidity is enabling foreign exchange traders the world over to access the vastly expanded array of trading and risk management strategies offered by options,” said Stephen Best, chief executive at FX Bridge Technologies in New York.
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FX Bridge’s flagship platform, ProTrader Plus, enables banks and brokers to offer trading in FX options, spot FX, metals, energy and contracts for difference to their individual and institutional clients. Existing providers of liquidity in FX options include Citi and UBS.
Previously only brokers and banks capable of making markets could use ProTrader Plus, but FX Bridge partnered with Citi to launch a prime-brokerage facility at the start of the year to open up the platform to broader use. With Citi’s help, banks and brokers can now offer clients liquidity in FX options through the platform without taking market risk themselves.
With the NFA’s leverage rules affecting FX traders in US, brokers are keen to transfer this market to FX Options. Alpari, a leading FX broker recently launched FX Options offering the FX Bridge platform.
Société Générale has consistently been delivering innovative and efficient products to its corporate FX clients and has been ranked 7th in 2008 and 8th in 2009 in the Euromoney FX Poll. Their fame in the FX markets was given a further boost when they were the top forecaster for the Euro in a Reuters poll in June.