GFI Group launches Fenics Trader – a liquidity venue for forex options

It’s interesting to see how the niches of forex are developing on their on now – both binaries and options

It’s interesting to see how the niches of forex are developing on their on now – both binaries and options are becoming a bit more popular. I still think that forex options are going to be somewhat marginal in the coming years but binaries may become more popular with unskilled traders.

Just recently FX Bridge Technologies announced that Citi FX will provide foreign exchange prime brokerage services to eligible brokers using FX Bridge’s trading platform to offer options, CFDs and spot FX trading to clients. I’m sure we will see more of such news in the coming months.

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GFI Group (NYSE: “GFIG”) announced the launch of Fenics Trader, a single point of access to multi-bank liquidity for foreign exchange options. This pioneering technology facilitates independent FX options price discovery, offering a “many-to-many” venue for bilateral trading and execution. FENICS Trader is supported by 9 of the world’s leading banks, with others to go live in early 2011. Live liquidity banks include BNP Paribas, Commonwealth Bank of Australia, Credit Suisse, UBS and Unicredit Bank AG.

During a 6 month soft launch period, trade volumes grew impressively, rising to over 120 trades per month. This soft launch involved 20 of GFI FENICS’ clients.

FENICS Trader allows clients to calculate indicative prices based on banks’ proprietary volatility surfaces. Using “Request for Quote” (RFQ) technology clients receive a tradable price from their preferred liquidity bank. Once the price is agreed, electronic execution is completed on a bi-lateral basis. At present FENICS Trader supports European vanilla and simple two-legged structures. Trades can be priced in volatility or premium terms. FENICS Trader is available to clients via the FENICS ProfessionalTM platform.

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