As a futures trader who takes positions in foreign-exchange contracts at the Warsaw Commodity Exchange (WGT) in Poland, Peter Kochanek knows the meaning of volatility.
Kochanek trades futures on four currency pairs - dollar versus zloty, euro versus zloty, Swiss franc versus zloty and dollar versus euro. The paris are all dominated in the Polish zloty (whose symbol is PLN), an emerging market currency that, by definition, is volatile.
"We arbitrage between the futures market in Warsaw and the interbank-cash market over-the-counter," explains Kochanek, a managing director of DMK Trading, a proprietary-trading group.
But soon the futures trader, who stands in an open-outcry pit, will have access to an Internet-based electronic-dealing system called Fimatfx.com from Fimat, a global-brokerage firm. The system will give him 24-hour access to compatible forex spot and forwards contracts to trade against.
In development for the past seven months, Fimatfx.com is an Internet-based front-end electronic-trading system for foreign-exchange markets that Fimat, part of the Societe Generale Group, is rolling out to institutional clients.
"We've been testing the system around the globe from Australia to Winnepeg," says Julian Knight, FX manager, Fimat International Banque, U.K. Branch.
In February, the system was in its fourth round of beta tests with about 65 clients that include commodity-trading advisers, currency funds, hedge funds and futures-commission merchants (FCMs). Characterizing them as "pretty high volume traders," Knight says these clients trade up to 40 times a day. The next phase is to go live with about 150 users by the end of March, he says.
Developed by BrokerBox, a United Kingdom technology company headquartered in London, which also hosts the system in a data center, Fimatfx.com incorporates auto-dealing, instant messaging, customizable-quote windows, real-time data, streaming news, and technical-charting packages, among other features.
"BrokerBox provided us with the raw shell of the system which has all this indicative data," says Knight. Fimat then modified the system to carry a proprietary in-house price engine. Thus, it can offer features like Deal-able Price Push, which automatically quotes the client without dealer intervention.
While other FCMs like UBS Futures provide systems, and others are white-labeling bank platforms, "No one has cash and futures," claims Knight, who notes that adding on (features like) Deal-able Price Push, and the ability to list 80,000 instruments on the system, gives his firm a "full-circle competitive edge."
"The more bells and whistles a company puts on a platform, the better for us," agrees Kochanek, who was eager to go live in February. "The main feature is the transactional prices on the screen, where we can just point and click and trade these currencies. When you see a price we can make money on, we can transact without having to call the bank desks," he says.
Today, clients call a desk on the voice line or Reuters dealing platform, says Knight. "We wanted to enhance it at that level," says Knight, who notes that through a real-time dealing log, trades are processed straight through to the client's back office.
In a move to raise the service level further, Fimat is going to make its entire product set - equities, fixed income, commodities, energy and all futures and options - available to forex clients via the single Internet platform.
According to Bob Iati, TowerGroup's research director for securities and capital markets, Fimat's goal is not necessarily to generate liquidity in these other products. "It's more to improve services by broadening product offerings. I can make it more convenient for my customers to stay on one particular portal and to do different deals in several asset classes, rather than having to go from one e-portal to another or click in five different ways. That is likely to make their overall product set better," contends Iati. Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio