NDF and Currency Options Activity Rises in January on US-Based SEFs
- Trading volumes on Swap Execution Facilities rose on a month-on-month basis in January. The US regulated entities saw an uptake in overall volumes across its two currency instruments, NDFs and Options.
The newly appointed executing venues, Swap Execution Facilities (SEFs) continue to gain traction among trading participants. SEF registered members reported volumes for the month of January, under the FIA SEF Tracker. Volumes increased across both FX products with the total value of trades topping $743 billion during the month.
The CFTC authorized exchange saw volumes increase 4.35% on a MoM basis, in December, members reported a total of $711 billion, with $402 billion in NDF contracts and $309 in FX Options contracts. In January, NDF instruments totalled, $424 billion and Currency Options $318, both rising from figures reported in December.
Inter-Dealer Brokers Dominate
The bulk of the orders are executed on four venues, the world's largest inter-dealer brokers such as ICAP and BGC are in top spot. In January, ICAP was the most liquid FX NDFs venue reporting a total of $124 billion in notional volumes. In the Currency Options market BGC led the way with a total of $104 billion. Tullett Prebon and GFI were the next most active in the NDF segment.
The Brazilian real was the most active NDF contract with the lion’s share of activity, the BRL contract had 43% market share, followed by Asia’s second most populous country's currency the Indian rupee, which recorded 9.5% in trading flows. South American cross, the Chilean peso and Asia's Chinese yuan were the next most liquid at 3rd and 4th place, respectively.
NDFs are defined as synthetic FX forward contracts on non-convertible currencies or are traded on currencies with low 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 in the marketplace, the crosses are predominantly from emerging market nations which are undergoing economic reform and liberalization.
FIA: SEF Volumes by Member
The NDF contract is used mainly used by hedgers to manage currency exposure, however in 2013, the Indian rupee INR NDF contract saw speculators bullying the market in an attempt to destabilize the volatile INR contract which weakened 20% against the dollar.
SEFs were established in 2013 amid new rules deployed in the Dodd-Frank Act. The SEF provides pre-trade information and centrally clears the OTC contracts, the bulk of volumes are on interest rate swaps, followed by credit and FX contracts.
Last month, BGC reported that it had enhanced its product offering on its e-Trading Platform Trading Platform In the FX space, a currency trading platform is a software provided by brokers to their respective client base, garnering access as traders in the broader market. Most commonly, this reflects an online interface or mobile app, complete with tools for order processing.Every broker needs one or more trading platforms to accommodate the needs of different clients. Being the backbone of the company’s offering, a trading platform provides clients with quotes, a selection of instruments to trade, real In the FX space, a currency trading platform is a software provided by brokers to their respective client base, garnering access as traders in the broader market. Most commonly, this reflects an online interface or mobile app, complete with tools for order processing.Every broker needs one or more trading platforms to accommodate the needs of different clients. Being the backbone of the company’s offering, a trading platform provides clients with quotes, a selection of instruments to trade, real Read this Term, the global produced added the INR NDF contract.
The newly appointed executing venues, Swap Execution Facilities (SEFs) continue to gain traction among trading participants. SEF registered members reported volumes for the month of January, under the FIA SEF Tracker. Volumes increased across both FX products with the total value of trades topping $743 billion during the month.
The CFTC authorized exchange saw volumes increase 4.35% on a MoM basis, in December, members reported a total of $711 billion, with $402 billion in NDF contracts and $309 in FX Options contracts. In January, NDF instruments totalled, $424 billion and Currency Options $318, both rising from figures reported in December.
Inter-Dealer Brokers Dominate
The bulk of the orders are executed on four venues, the world's largest inter-dealer brokers such as ICAP and BGC are in top spot. In January, ICAP was the most liquid FX NDFs venue reporting a total of $124 billion in notional volumes. In the Currency Options market BGC led the way with a total of $104 billion. Tullett Prebon and GFI were the next most active in the NDF segment.
The Brazilian real was the most active NDF contract with the lion’s share of activity, the BRL contract had 43% market share, followed by Asia’s second most populous country's currency the Indian rupee, which recorded 9.5% in trading flows. South American cross, the Chilean peso and Asia's Chinese yuan were the next most liquid at 3rd and 4th place, respectively.
NDFs are defined as synthetic FX forward contracts on non-convertible currencies or are traded on currencies with low 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 in the marketplace, the crosses are predominantly from emerging market nations which are undergoing economic reform and liberalization.
FIA: SEF Volumes by Member
The NDF contract is used mainly used by hedgers to manage currency exposure, however in 2013, the Indian rupee INR NDF contract saw speculators bullying the market in an attempt to destabilize the volatile INR contract which weakened 20% against the dollar.
SEFs were established in 2013 amid new rules deployed in the Dodd-Frank Act. The SEF provides pre-trade information and centrally clears the OTC contracts, the bulk of volumes are on interest rate swaps, followed by credit and FX contracts.
Last month, BGC reported that it had enhanced its product offering on its e-Trading Platform Trading Platform In the FX space, a currency trading platform is a software provided by brokers to their respective client base, garnering access as traders in the broader market. Most commonly, this reflects an online interface or mobile app, complete with tools for order processing.Every broker needs one or more trading platforms to accommodate the needs of different clients. Being the backbone of the company’s offering, a trading platform provides clients with quotes, a selection of instruments to trade, real In the FX space, a currency trading platform is a software provided by brokers to their respective client base, garnering access as traders in the broader market. Most commonly, this reflects an online interface or mobile app, complete with tools for order processing.Every broker needs one or more trading platforms to accommodate the needs of different clients. Being the backbone of the company’s offering, a trading platform provides clients with quotes, a selection of instruments to trade, real Read this Term, the global produced added the INR NDF contract.