FX Algo Usage Rises as Buy-Side Takes Charge


Algorithmic trading is gaining ground in FX among the buy-side, but there are variations between asset managers/pension funds and hedge funds/CTAs in adopting these tools. FlexTrade's Ivy Schmerken examines further.



FX Algos on the March?

Algorithmic trading is gaining ground in foreign exchange among asset managers and pension funds that have been traditionally slower than hedge funds and CTAs in adopting these tools.

Nearly one third of 2015 institutional FX volume was executed through algorithmic trading models, according to a recent Greenwich Associates global FX report. That is a sizeable jump from 2014 when about a quarter of total institutional flows were executed via algorithmic models, said Kevin McPartland, head of market structure and technology research at Greenwich Associates during  a recent webinar,  “FX Market Structure Update 2016.”

Nearly three quarters (73%) of institutional investors trade 76% of their global FX volume electronically, according to the Greenwich 2015 Global Foreign Exchange Study. The study was based on over 1,600 interviews with users from corporates, fund managers, hedge funds, banks, government entities and insurance companies, from the end of September through November 2015.

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FlexTrade is a global leader in broker-neutral, execution and order management trading systems for equities, FX, options, futures and fixed income. A pioneer in the field, FlexTrade introduced the first trading system that allowed clients to control and customize their proprietary algorithms while maintaining the confidentiality of their trading strategies. Change is the only constant in electronic trading. That's why FlexTrade is continuously upgrading its products and services. All can be tailored to meet the demanding requirements of a global client base of more than a 225 buy- and sell-side firms.
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