New Change FX’s feeds will be incorporated into oneZero’s suite of analytics in Data Source, adding a new stream of  independent FX reference data.

From now, clients will have the option to enhance trading performance by leveraging the New Change FX reference data in reporting.

Paul Lambert, chief executive of New Change FX, explained: “oneZero provides clients with extremely powerful analytics via Data Source Insights, and the addition of New Change FX’s benchmark data takes that to a new level.

“FX analytics are proving increasingly important for liquidity management and at New Change FX we share oneZero’s view that independent data is key to objective price measurement and improved trading outcomes.”

Read more: OneZero launches analytics to help traders review ‘last look’ impact

New Change FX has been authorized by the Financial Conduct Authority FCA) as a benchmark administrator since 2018.

Andrew Ralich, chief executive and co-founder of oneZero, said: “Today’s integration with New Change FX exemplifies how our adaptable data framework further enables clients to seamlessly access value-added services within our network of data partners. We are committed to continuing to build in new capabilities alongside the industry leading data and analytics capabilities that have been developed within oneZero’s Data Source product.”

Last December, oneZero added Cboe FX and State Street to its network of liquidity providers and venues. As part of the move, the two firms were granted access to more than 200 FX brokerages in the oneZero network which make over 10 million transaction and 150 billion quotes per day across retail and institutional FX markets.

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Putting the topic into context, John Rothstein, chief executive of Optiver UK highlighted the core differences in options as compared to spot, explaining that there are three key areas.

Firstly, the fact that options are very highly regulated as compared to spot was highlighted, with a second consideration being the fact that connectivity is still very high touch for things like expirations and negotiating prices.

The third point linked to data: “[…] the last thing is that the data that comes out of the options market is very light, sparse for everybody – which makes things like TCA and knowing where the market is and knowing who the liquidity providers are very difficult to come by.”

Elke Wenzler, head of trading at MEAG, agreed with Rothstein, asserting that having access to liquidity on the options side is very different and that the main consideration for swaps is to have access to the right liquidity.

Sana Horrich, senior FX trader at Banque de France, shared that from her perspective the next step is for FX swaps to move to a higher electronification.

In terms of the challenges facing FX swaps, she pointed to the risk of signalling for large amounts, further highlighting: “Today what we expect from the market is to have new tools, such as price streaming and algos for FX swaps to help us enhance our trading outcome.”

Paul Lambert, chief executive of New Change FX, suggested that when it comes to the electronification of the swaps market, you have to break it down into its parts: “Foreign exchange is a market where the price that you pay depends on where you are and who you ask.”

“With swaps this is even more true because of the credit element so you need to break it down into its elements for that market to really truly move forwards – what’s the neutral rate and what’s the credit element.”

Read more: FX swaps algorithms not currently a priority for buy and sell-side due to workflow preferences

Wenzler made clear that from her perspective, automating huge amounts of the swaps market is not the way forward, while Lambert asserted: “The worst thing you can do is automate a bad process – it’s like making a wonky wheel.” 

Importantly, Rothstein made sure to highlight that the issue of automation of vanilla FX options has already been solved by some exchanges, further adding that this is something for OTC players to keep in mind.

When asked to compare the tools which are used in spot and derivatives, panellists agreed that there were key differences and as a result bases that still need to be hit in order to facilitate use.

“We want to use the same tools but it’s a different set up you need to have the axes the same on the spot side, which needs a lot of involvement from other teams. A lot of problems you have to solve,” said Wenzler.

Rothstein highlighted the role that platforms and those with the tools can play, suggesting that the priority lies with these entities trying to connect as many dots as they can.

“They can’t necessarily solve all of the underlying problems in getting that access to credit, but they can at least allow some pass through of the requesting of price and the giving of price – which makes it so at least one or two of the steps for users accessing liquidity.”

The post TradeTech FX Europe 2023: FX derivatives trading can be streamlined through electronification, but data quality must be assured, say experts appeared first on The TRADE.