In light of a growing embrace for FX algo trading, Pragma has rolled out a new function for cross pair trading across its Pragma360 suite. The upgrade will help traders better utilize illiquid currency pairs algorithmically with best execution, as part of a new triangulation service.
Long-term investors and other traders are increasingly moving towards algo trading recently, a trend that looks to continue moving forward. Coupled with healthy demand from banks to offer such services for less-handled currency pairs, the triangulation service could serve a key role for multiple trading entities and venues.
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This trend was echoed by a recent study from Greenwich Associates, which found that there is an acute need to trade less liquid currency pairs amongst, specifically amongst real money investors and corporate treasury clients. Pragma has addressed the need with a triangulation service.
Spliced trades, better liquidity
The new service will be made available on the Pragma360 FX platform, helping splice trades into two. More specifically, this will include a split trade with a third more liquid currency, i.e. the investors looking to trade the NZD/JPY could see a trade separated into the NZD/USD and USD/JPY – in doing so the service can triangulate or roll up a price for the original NZD/JPY order and offer more liquidity for the original pair.
David Mechner, CEO of Pragma Securities, commented on the service: “Our clients want to extend the benefits of algorithmic trading to illiquid cross pairs. Thus, offering triangulation was a natural evolution for Pragma.”
“Triangulation of more liquid pairs results in a higher quality execution because of narrow spreads and greater liquidity. As a result, bank’s leveraging Pragma360 provide a better trading experience to their clients,” he added.