Forex Technologies Inc. Launches FTPrime and O'TRADE Cross-Currency Arbitrage Product
- New solution reselling liquidity and platform execution capabilities in a cost-competitive offering emerges, while an additional product seeks to capture fleeting arbitrage opportunities detected as market "leaks."
Forex Technologies Inc.(FTI), under the brand FTPrime and based in New York, has launched a gateway directly into the inter-bank market for individuals and small to midsize trading firms, and appears to be the latest company to emerge in this space, as per the company’s official press release today.
The company has several industry veterans on its executive team who have worked at numerous platform providers and technology developers, as per the FTPrime.com website, and all of whom have held senior positions at ACT Forex - a long time running foreign exchange platform developer still used by a respectable number of retail FX firms. The trio now consists of FTIs, CEO, COO and CTO according to the 'About Us' section of the FTI website.
Ex-ACT Forex Executives Join Forces at FTI
The new offering under the FTPrime brand was described in the press release as an ultimate suite of services that combines technology, Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term and prime brokerage to offer Forex traders both large and small unprecedented access to the inter-bank market, by leveling the playing field for participants regardless of their account size.
In addition, the company said most existing STP Liquidity Providers Liquidity Providers A liquidity provider (LP) constitutes either individual and/or institution that functions as a market maker in a given asset class. Broadly speaking, liquidity providers will act as the both the buyer and seller of a particular asset, thus making a market. In the equities space, many stock exchanges rely on liquidity providers who make the commitment to provide liquidity in a given equity. These liquidity providers commit to providing liquidity in the hopes that they will be able to make a profi A liquidity provider (LP) constitutes either individual and/or institution that functions as a market maker in a given asset class. Broadly speaking, liquidity providers will act as the both the buyer and seller of a particular asset, thus making a market. In the equities space, many stock exchanges rely on liquidity providers who make the commitment to provide liquidity in a given equity. These liquidity providers commit to providing liquidity in the hopes that they will be able to make a profi Read this Term do not provide prime brokerage/credit services, and most existing prime brokers do not offer execution platforms, and how FTPrime balances this difference by catering on both sides with a competitively priced offering normally reserved for much larger, highly capitalized entities. This is packaged in an offering of various retail FX platforms at a transaction cost of $6 per $1 Million traded, as described in the announcement.
Anatoly Tkach, CEO, FTPrime
FTPrime CEO, Anatoly Tkach, said in the official press release, "We’re proud to finally offer a solution that is specifically focused on the market players who are unable to meet capitalization values required by major prime brokers and government regulatory bodies."
The company mentions that it provides direct access via the Graphical User Interface (GUI) or Financial Information Exchange (FIX) api, of platforms such as Currenex, MetaTrader4, Fortex and VTtrader, and these capabilities are offered to money managers and brokerages looking to white-label the platforms, combined with the company's prime of prime solution where client funds are held at Advanced Markets or FCStone, as an example.
Existing Trend: Reselling Solutions in Custom Offering
The company lists a number of other strategic partners as it looks to combine its reselling capabilities in a cross connected environment provided within its offering. The ongoing synergies and combination of solutions from a wide array of companies appear to be aimed at providing the best of each solution, rather than a complete solution devoid of 3rd party reliance.
It will be interesting to see how FTPrime fares as its pricing model at barely $6 per million could appeal as it competes with a large number of companies which have already joined this growing space of prime of prime providers. Given the team's experience in overseeing technology development, this could be their edge, as compared with a non-technology developer focused re-seller. And as can be seen below, the company appears to be involved in other dimensions of financial services product offerings.
O'Trade Cross Currency Arbitrage Product: Scalping Evolved?
While investigating the above news, Forex Magnates discovered a link on FTPrime.com redirecting to TForex.com, short for TechForex, and also a trading name of Forex Technologies Inc.
One of the products listed on that page is called O'TRADE, short for Opportunity Trade, which describes a product designed to arb the FX market, by taking advantage of detected arbitrage opportunities and created after FTI was founded in 2011, and described as follows:
"The O’TRADE’s concept of Cyclic Trading employs the cross currency arbitrage on the price discrepancy among three or more different currencies in the foreign exchange market. The arbitrage strategy involves a chain of trades, exchanging the initial currency for a second, the second currency for a third, and so on, and the last currency for the initial."
While cross currency arbitrage is also considered a form of statistical arbitrage, which in theory makes perfect sense with such fleeting opportunities existing day-to-day in the FX markets, it may be harder to execute in practice as such latency driven approaches could be less scalable if a large number of traders join a particular strategy or given signal, in Forex Magnates' opinion. Below is an excerpt of a diagram depicting a cyclical arbitrage scenario, as seen on Otradefx.com, using equities denominated in various currencies (such as might be common in a dual-listing or ADR):
![example excerpt of O'Trade diagram [source:otradefx.com]](https://www.financemagnates.com/wp-content/uploads/fxmag/2014/05/example-of-OTrade.jpg)
Example Excerpt of O'Trade Diagram [source:otradefx.com]
Nevertheless, given the markets increased efficiency in recent years, it will be very interesting to see how successful O'TRADE could be given all the attention on HFT in both equity markets and Foreign Exchange, where most recently new platforms such as the IEX alternative Trading System (ATS), aimed to implement randomized pauses to prevent such exploiting of fleeting arbitrage opportunities, or in the case of equities - to avoid the effects of potential front running.
Forex Technologies Inc.(FTI), under the brand FTPrime and based in New York, has launched a gateway directly into the inter-bank market for individuals and small to midsize trading firms, and appears to be the latest company to emerge in this space, as per the company’s official press release today.
The company has several industry veterans on its executive team who have worked at numerous platform providers and technology developers, as per the FTPrime.com website, and all of whom have held senior positions at ACT Forex - a long time running foreign exchange platform developer still used by a respectable number of retail FX firms. The trio now consists of FTIs, CEO, COO and CTO according to the 'About Us' section of the FTI website.
Ex-ACT Forex Executives Join Forces at FTI
The new offering under the FTPrime brand was described in the press release as an ultimate suite of services that combines technology, Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term and prime brokerage to offer Forex traders both large and small unprecedented access to the inter-bank market, by leveling the playing field for participants regardless of their account size.
In addition, the company said most existing STP Liquidity Providers Liquidity Providers A liquidity provider (LP) constitutes either individual and/or institution that functions as a market maker in a given asset class. Broadly speaking, liquidity providers will act as the both the buyer and seller of a particular asset, thus making a market. In the equities space, many stock exchanges rely on liquidity providers who make the commitment to provide liquidity in a given equity. These liquidity providers commit to providing liquidity in the hopes that they will be able to make a profi A liquidity provider (LP) constitutes either individual and/or institution that functions as a market maker in a given asset class. Broadly speaking, liquidity providers will act as the both the buyer and seller of a particular asset, thus making a market. In the equities space, many stock exchanges rely on liquidity providers who make the commitment to provide liquidity in a given equity. These liquidity providers commit to providing liquidity in the hopes that they will be able to make a profi Read this Term do not provide prime brokerage/credit services, and most existing prime brokers do not offer execution platforms, and how FTPrime balances this difference by catering on both sides with a competitively priced offering normally reserved for much larger, highly capitalized entities. This is packaged in an offering of various retail FX platforms at a transaction cost of $6 per $1 Million traded, as described in the announcement.
Anatoly Tkach, CEO, FTPrime
FTPrime CEO, Anatoly Tkach, said in the official press release, "We’re proud to finally offer a solution that is specifically focused on the market players who are unable to meet capitalization values required by major prime brokers and government regulatory bodies."
The company mentions that it provides direct access via the Graphical User Interface (GUI) or Financial Information Exchange (FIX) api, of platforms such as Currenex, MetaTrader4, Fortex and VTtrader, and these capabilities are offered to money managers and brokerages looking to white-label the platforms, combined with the company's prime of prime solution where client funds are held at Advanced Markets or FCStone, as an example.
Existing Trend: Reselling Solutions in Custom Offering
The company lists a number of other strategic partners as it looks to combine its reselling capabilities in a cross connected environment provided within its offering. The ongoing synergies and combination of solutions from a wide array of companies appear to be aimed at providing the best of each solution, rather than a complete solution devoid of 3rd party reliance.
It will be interesting to see how FTPrime fares as its pricing model at barely $6 per million could appeal as it competes with a large number of companies which have already joined this growing space of prime of prime providers. Given the team's experience in overseeing technology development, this could be their edge, as compared with a non-technology developer focused re-seller. And as can be seen below, the company appears to be involved in other dimensions of financial services product offerings.
O'Trade Cross Currency Arbitrage Product: Scalping Evolved?
While investigating the above news, Forex Magnates discovered a link on FTPrime.com redirecting to TForex.com, short for TechForex, and also a trading name of Forex Technologies Inc.
One of the products listed on that page is called O'TRADE, short for Opportunity Trade, which describes a product designed to arb the FX market, by taking advantage of detected arbitrage opportunities and created after FTI was founded in 2011, and described as follows:
"The O’TRADE’s concept of Cyclic Trading employs the cross currency arbitrage on the price discrepancy among three or more different currencies in the foreign exchange market. The arbitrage strategy involves a chain of trades, exchanging the initial currency for a second, the second currency for a third, and so on, and the last currency for the initial."
While cross currency arbitrage is also considered a form of statistical arbitrage, which in theory makes perfect sense with such fleeting opportunities existing day-to-day in the FX markets, it may be harder to execute in practice as such latency driven approaches could be less scalable if a large number of traders join a particular strategy or given signal, in Forex Magnates' opinion. Below is an excerpt of a diagram depicting a cyclical arbitrage scenario, as seen on Otradefx.com, using equities denominated in various currencies (such as might be common in a dual-listing or ADR):
Example Excerpt of O'Trade Diagram [source:otradefx.com]
Nevertheless, given the markets increased efficiency in recent years, it will be very interesting to see how successful O'TRADE could be given all the attention on HFT in both equity markets and Foreign Exchange, where most recently new platforms such as the IEX alternative Trading System (ATS), aimed to implement randomized pauses to prevent such exploiting of fleeting arbitrage opportunities, or in the case of equities - to avoid the effects of potential front running.