Category Archives: Trading

Electronic Trading Makes Frontier Markets More Attractive

The global frontier markets are mature enough to give the emerging markets a run for their money, according to Aite Group’s Danielle Tierney and Gabriel Wang.

The industry analyst firm recently published a research note, Frontier Markets: Emerging World: Exploring the New Frontier,  in which the authors examine the macroeconomic and fundamentals of 65 frontier markets and found reasonable valuations, low volatility and low correlation between developed and emerging markets.

Usually I am not interested in the straight economic research, but the authors tossed in chart showing that roughly a third of the frontier markets had deployed Nasdaq OMX’s X-stream multi-asset trading platform since 2008.

I’m sure other exchange technology providers like Deutsche Bourse, London Stock Exchange and the New York Stock Exchange had similar wins over the same period, but since I’m not paid for writing this blog let us just take it as a given.

That is about time I started to notice that a rash of press release announcing the various contact wins. It came after assigning one of my favorite stories about the Iraq Stock Exchange’s paper-based trading and had a T+30 settlement cycle (circa 2006) and the post-Regulation NMS exchange consolidation.

As these markets continue to invest in electronic trading, the more efficient they should become.

However, I doubt that it will become much easier for foreign investors to trade directly in the markets due to the standard local market regulations and currency control issues.

Omega Securities Mints New CEO

Sean Debotte has been named president and CEO of Canadian equities and fixed-income alternative trading system (ATS) operator Omega Securities, corporate officials announced today.

Debotte first joined Omega in 2011 as director of business development. He replaces Brian Crew, who departed in October 2012- the same month that Omega began opening its planned Lynx ATS to industry testing.

Officials expect that the new platform will go live on February 3, but are still waiting for the Ontario Securities Commission (OSC) to sign off on the market’s Dynamic Pricing Model that determines a maker/taker rebate for each security based on its previous month’s trading volume.

The new ATS will use the same order entry and market data protocols as the Omega ATS and will not charge market data, subscription or connectivity fees.

The only other difference, say officials, is that Lynx will use broker attribution as a default setting.

Kevinonthestreet: FX Futures Volume Set to Rise

It’s only a matter of time before more investors move away from foreign-exchange (FX) swaps to FX futures, according to the latest research from Kevin McPartland, head of market structure and technology advisory service at analyst firm Greenwich and friend of the blog.

He attributes the coming migration due FX swap’s higher regulatory and margin costs, even though regulators exempted them from many swap requirements, and the lack of need by financial users for custom FX swap products compared to their corporate counterparts.

Check out his blog for more opinions and analysis on the OTC derivatives marketplace.

 

 

BTFDtv Offers Online Channel for Trader Education

It’s an early Saturday afternoon before the first full week of January, which means escaping family conversations is sitting watching reruns until the your programs start up again in a week or so.

You might want to take this time to check out BTFDtv, a new online video network for traders by traders.

Don’t expect a highly polished production value like from CNBC or Fox Business and the online network is the first to admit it on its homepage: “BTFDtv has no producers, writers, editors or on air rules.”

It’s more like a Skype session than a television program, but its backers are betting viewers are more interested in the content than its delivery.

Oh, the initials? I am told that it stands for Buy the Friendly Dip. This is a family friendly blog after all.

SEF Volumes Likely to Ramp Up in Early 2014

Javelin SEF is the first swaps execution facility (SEF) operator to submit a list of potential instruments that the electronic trading platform would like to “make available to trade” to the US Commodity Futures Trading Commission (CFTC), Bloomberg’s Silla Brush reported on October 19.

Greenwich Associates’ Kevin McPartland, who is quoted in the story, offers expanded analysis in a blog post of his own.

It’s not surprising that an all-electronic operation like Javelin was the first to break the surface tension with such a broad instrument list since it has no interest of keeping these transaction voice-based.

The CFTC has 90 days to decide whether to approve or reject Javelin SEF’s list. If it does not extend its decision deadline, traders will be required to execute trades for dollar-, sterling- and euro-denominated interest rate swaps on SEFs starting in mid-January 2014.

The regulator also started the clock ticking on a 30-day industry comment period for the SEF’s list that began on the filing date and, hopefully, will provide interesting opinions.