Bloomberg Tradebook, a wholly owned agency broker of Bloomberg L.P., will be shutting its electronic foreign exchange (FX) trading platform in a few weeks, industry sources confirmed to Finance Magnates. The Tradebook FX offering is integrated with the Bloomberg Professional service.
In a statement released exclusively to Finance Magnates, a Bloomberg Tradebook spokesperson said: “In the interest of concentrating focus and investment on our core mission of providing quality agency brokerage services rooted in data and analytics, Bloomberg Tradebook will discontinue our FX business. With that said, Bloomberg LP will continue to have a strong presence in FX execution and analytics on the Terminal.”
The Bloomberg Tradebook FX system, which has seen its share of currency trading dwindle in recent years, is still seen as the authority on prices for certain foreign-exchange pairs, but the venue most likely failed to revive liquidity in its electronic market.
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Interdealer brokers like Bloomberg Tradebook are feeling the pain from a drop in their share of FX trading volumes which declined significantly to around 40 percent from nearly 65 percent in the early 2000s. This was due to major banks conducting more business internally as they have little reason to pay the extra expense associated with routing trades through outside platforms at a time when a drop in volatility is already squeezing profits.
Average daily volumes on EBS, the foreign exchange trading unit of NEX Group, the company formerly known as ICAP, registered a 6 percent decline when compared to 2015. In addition, a group of Thomson Reuters’s platforms reported $349 billion a day in December 2016 compared to more than $400 billion a few years ago.
Tradebook’s foreign-exchange platform accounts for nearly 11 percent of the total global currency trading market, while the EBS and Thomson Reuters venues account for a combined 40 percent of the $1 trillion traded daily over such platforms.
Bloomberg Tradebook FX operates as a marketplace for spot dealing in more than 40 currencies and enables clients to roll their trades in 28 currencies electronically. It allows institutional traders to transact in foreign currency exchange while preserving their anonymity from other market participants. Traders are also able to use sophisticated algorithms to implement trading strategies.