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The bid–ask spread is the difference between the prices quoted for an immediate sale (ask) and an immediate purchase (bid) for stocks, futures contracts, options, or currency pairs in some auction scenario. The size of the bid–ask spread in a security is one measure of the liquidity of the market and of the size of the transaction cost. If the spread is 0 then it is a frictionless asset.
Liquidity risk is a financial risk that for a certain period of time a given financial asset, security or commodity cannot be traded quickly enough in the market without impacting the market price.
In finance, a contract for difference (CFD) is a legally binding agreement that creates, defines, and governs mutual rights and obligations between two parties, typically described as "buyer" and "seller", stipulating that the buyer will pay to the seller the difference between the current value of an asset and its value at contract time. If the closing trade price is higher than the opening price, then the seller will pay the buyer the difference, and that will be the buyer's profit. The opposite is also true. That is, if the current asset price is lower at the exit price than the value at the contract's opening, then the seller, rather than the buyer, will benefit from the difference.
An electronic communication network (ECN) is a type of computerized forum or network that facilitates the trading of financial products outside traditional stock exchanges. An ECN is generally an electronic system that widely disseminates orders entered by market makers to third parties and permits the orders to be executed against in whole or in part. The primary products that are traded on ECNs are stocks and currencies. ECNs are generally passive computer-driven networks that internally match limit orders and charge a very small per share transaction fee.
In finance, a currency swap is an interest rate derivative (IRD). In particular it is a linear IRD, and one of the most liquid benchmark products spanning multiple currencies simultaneously. It has pricing associations with interest rate swaps (IRSs), foreign exchange (FX) rates, and FX swaps (FXSs).
Electronic Broking Services (EBS) is a wholesale electronic trading platform used to trade on the foreign exchange market (FX) with market-making banks. It was originally created as a partnership by large banks and then became part of CME Group.
A trading room gathers traders operating on financial markets. The trading room is also often called the front office. The terms "dealing room" and "trading floor" are also used, the latter being inspired from that of an open outcry stock exchange. As open outcry is gradually replaced by electronic trading, the trading room becomes the only remaining place that is emblematic of the financial market. It is also the likeliest place within the financial institution where the most recent technologies are implemented before being disseminated in its other businesses.
Direct market access (DMA) is a term used in financial markets to describe electronic trading facilities that give investors wishing to trade in financial instruments a way to interact with the order book of an exchange. Normally, trading on the order book is restricted to broker-dealers and market making firms that are members of the exchange. Using DMA, investment companies and other private traders use the information technology infrastructure of sell side firms such as investment banks and the market access that those firms possess, but control the way a trading transaction is managed themselves rather than passing the order over to the broker's own in-house traders for execution. Today, DMA is often combined with algorithmic trading giving access to many different trading strategies. Certain forms of DMA, most notably "sponsored access", have raised substantial regulatory concerns because of the possibility of a malfunction by an investor to cause widespread market disruption.
Treasury management includes management of an enterprise's holdings, with the ultimate goal of managing the firm's liquidity and mitigating its operational-, financial- and reputational risk. Treasury Management includes a firm's collections, disbursements, concentration, investment and funding activities. In larger firms, it may also inhere the financial risk management function. In general, a company's treasury operations comes under the control of the CFO, Vice-president / Director of Finance, or Treasurer; and is handled on a day-to-day basis by the organization's treasury staff, controller, or comptroller.
In finance, a dark pool is a private forum for trading securities, derivatives, and other financial instruments. Liquidity on these markets is called dark pool liquidity. The bulk of dark pool trades represent large trades by financial institutions that are offered away from public exchanges like the New York Stock Exchange and the NASDAQ, so that such trades remain confidential and outside the purview of the general investing public. The fragmentation of electronic trading platforms has allowed dark pools to be created, and they are normally accessed through crossing networks or directly among market participants via private contractual arrangements. Generally, dark pools are not available to the public, but in some cases, they may be accessed indirectly by retail investors and traders via retail brokers.
dbFX was Deutsche Bank’s online margin foreign exchange trading platform and service for individual and institutional investors including financial institutions, hedge funds, corporations, asset managers, money managers, commodity trading advisors, broker-dealers, brokerage firms, high net worth individuals, and sophisticated and professional traders, which operated from 2006-2011.
High-frequency trading (HFT) is a type of algorithmic trading in finance characterized by high speeds, high turnover rates, and high order-to-trade ratios that leverages high-frequency financial data and electronic trading tools. While there is no single definition of HFT, among its key attributes are highly sophisticated algorithms, co-location, and very short-term investment horizons in trading securities. HFT uses proprietary trading strategies carried out by computers to move in and out of positions in seconds or fractions of a second.
Matchbook FX was an internet-based electronic communication network for trading currency online in the Spot-FX or foreign exchange market. It operated between 1999 and 2002.
CitiFX Pro was Citigroup's online foreign exchange market trading platform for retail and small institutional traders including commodity trading advisors, broker-dealers, money managers, and hedge funds. CitiFX Pro discontinued offering services to clients in June 2015 and sold all U.S. accounts to FXCM, and international accounts to Saxo Bank.
The Moscow Exchange is the largest exchange in Russia, operating trading markets in equities, bonds, derivatives, the foreign exchange market, money markets, and precious metals. The Moscow Exchange also operates Russia's central securities depository, the National Settlement Depository (NSD), and the country's largest clearing service provider, the National Clearing Centre. The exchange was formed in 2011 in a merger of the Moscow Interbank Currency Exchange and the Russian Trading System.
Smart order routing (SOR) is an automated process of handling orders, aimed at taking the best available opportunity throughout a range of different trading venues.
LMAX Group is a global financial technology company which operates multiple institutional execution venues for electronic foreign exchange (FX) and crypto currency trading. The Group's portfolio includes LMAX Exchange, LMAX Global and LMAX Digital.
Last look is a trading practice where the liquidity provider (LP) provides a quote rather than a firm price into the trading system or execution venue. Last look venues are often used to conduct trading on foreign exchange markets (FX) for retail foreign exchange trading.
XTX Markets is an algorithmic trading company. It was founded in January 2015 by Alexander Gerko, who is currently co-CEO alongside Hans Buehler. The company employs 190 people globally and uses algorithms to trade the difference in market prices across a variety of venues.
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References
- ↑ "An online foreign exchange aggregator enabling you to search RBI authorised money changers in India". Travelmudra. March 17, 2015. Archived from the original on December 22, 2014.
- ↑ "5 Reasons FX Liquidity Aggregation Is So Challenging". Seeking Alpha. November 26, 2012.
- ↑ "smartTrade LiqudityAggregator". Smart Trade. January 30, 2013. Archived from the original on October 22, 2014.
- ↑ "What is a FX Aggregator? -Improve ROI and Delivery to Market". Olfa Trade.
- ↑ "Gold-i Bolsters Offering With Matrix 2.0 Liquidity Management System | Finance Magnates". Finance Magnates | Financial and business news. May 23, 2016.
- ↑ "Top 5 Reasons Why Legacy FX Aggregation Providers are Failing". Finance Magnets. Retrieved January 28, 2016.