FX Alliance, the leading independent global provider of electronic foreign exchange trading solutions, announced today that clients are now able to execute FX options on the FXall Trading platform. Clients can now submit FX option request-for-quotes (RFQs) to multiple banks and deal electronically on the same platform they use for trading in spot, forwards, swaps, non-deliverable forwards (NDFs), precious metals and money markets.
Participants completed live option trades in FXall’s production environment on Friday as part of its options roll-out program. FXall offers a full end-to-end options workflow solution including pre-trade indicative calculations, execution of multiple strategies with or without delta exchange, and post-trade functionality for settlement, premium netting and payments. At initial launch BofA Merrill Lynch and Credit Suisse will be providing streaming electronic options prices to clients. Eight providers will support the post trade settlement functionality and additional banks are expected to become liquidity providers in the future.
Phil Weisberg, CEO at FXall commented, “We continue to extend our product offering to meet the complete execution and workflow needs of our clients, and now the full suite includes FX options. We have worked closely with BofA Merrill Lynch and Credit Suisse to evolve the electronic FX options market and deliver a superior user experience. We anticipate that many of our existing clients will want to take full advantage of this new integrated capability that is delivered uniquely through this channel. As our clients’ conflict-free partner of choice, we continue to invest in our technology to provide innovative products and solutions to manage risk and fulfill trading objectives.”
Chris Bae, global co-head of FX Trading at BofA Merrill Lynch commented, “Our commitment to clients has always been to deliver FX Options liquidity to the highest standard. For BofA Merrill Lynch, partnering with FXall ensures we continue to meet the e-FX Option needs of existing clients, as well as any new corporate clients who want to take advantage of our capabilities; a key priority for BofA Merrill Lynch as we look to serve this important client set. We are extremely excited about being at the vanguard of this e-FX options initiative and look forward to working closely with FXall in the future.”
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FXall’s option product supports the trading of European option strategies including Puts, Calls, Straddles, Strangles, Spreads, Collars, Butterflies and Strips. Users can also create custom multi-leg strategies to facilitate cash flow planning. The platform’s option calculator facilitates price discovery by solving for strikes, premiums and notional amounts prior to execution.
“FXall’s option solution is fully integrated into our client’s trading and settlement workflow, which makes our offering unique in the market. FXall is pleased to help bring the benefits of electronic trading to the market today, while also taking an evolutionary step forward in meeting the objectives of financial regulatory reform for transparency and best execution,” said Eric Jawitz, Director, Options Product Manager at FXall.
Forex Magnates have written a detailed report on FX Options, available in the current Q2 quarterly report.
A curency option is defined as a contract that grants the holder the right, but not the obligation, to buy or sell currency at a specified exchange rate during a specified period of time.