Best Multi-Asset EMS: FlexTrade Systems

Terry Flanagan

DURING 2013, FLEXTRADE Systems redoubled its efforts to adapt its multi-asset EMS, FlexTRADER, to the new realities of cash and derivatives trading.

FlexTrade Systems and its customers are experiencing the impact of rapid transformation in the fixed-income markets brought on by new regulations and shifting market dynamics. With market participants readying for more electronic trading in bonds and interest-rate erivatives, the technological challenges are mounting.

“We continue to push our products further into other asset classes,” said Jamie Benincasa, senior vice president at Great Neck, N.Y.-based FlexTrade. “Given the advent of new trading facilities like SEFs, we have been working diligently to ensure that our platform can accommodate these new trading venues, and we will be introducing further functionality in the coming year.”

Jamie Benincasa, FlexTrade

Jamie Benincasa, FlexTrade

The gradual ‘electronification’ of the fixed-income marketplace is a trend that will continue in 2014. FlexTRADER is certified to trade U.S. Treasuries as a member of the BGC Partners Preferred Vendor Program. As such, it can connect directly to BGC’s proprietary trading platform to offer customers access to BGC’s electronically traded products, including U.S. Treasuries, sovereigns, and credit derivatives.

“Our team of developers has been actively engaged in providing fixed-income trading and analytical capabilities to our clients by interfacing with liquidity providers as well as enabling single-dealer platforms to distribute prices into our front end,” said Benincasa.

In addition, FlexTRADER provides out-of-the-box, cross-asset trading strategies which can be customized, global access to broker algorithms, and the ability to build proprietary algorithms. The platform also offers “organically developed” pre-trade, real-time and post-trade analytics (through its FlexTQM product); predictive analytics (FlexEdge); risk- and cost-optimized portfolio trade scheduling (FlexPTS); advanced integrations with major OMSs; smart order routing; and Complex Event Processing (CEP).

“Within the multi-asset space, FlexTrade has been deeply involved in refining the available functionality we offer to our clients,” said Benincasa. “For global equities, we’ve introduced a suite of predictive analytics that enables our clients to make smarter trading decisions in terms of limit prices and timing. We’ve also combined predictive analytics with our portfolio trade-scheduling product to allow customers to truly capture alpha on their given strategies.”

FlexTrade’s multi-asset capabilities didn’t go unnoticed in 2013. Pine River Capital Management deployed FlexTRADER to facilitate trading for equities, FX and listed derivatives. “Trading strategies that might have been successful five years ago simply might no longer be attractive,” said Scott Reinhart, head of Pine River Capital Management’s Hong Kong office, in a statement. “FlexTrade’s solutions have helped us to
expand our existing strategies and quickly launch new ones across multiple asset classes and geographic regions.”

Within the FX space, FlexTrade is “widely regarded as the provider of the most sophisticated trading technology, especially for large buy-side institutions,” Benincasa said. “Our efforts for this asset class include state-of-the-art, multi-currency netting functionality, blocking and allocations, as well as the ability to handle allocations real-time via FIX. We’ve also continued to add to a growing list of liquidity providers for spot, forward, and NDF currency pairs.”

As for futures, “large buy-side institutions have very complex requirements with regard to futures trading,” Benincasa said. “FlexTrade has spent countless hours giving our clients the ability to perform complex blocking, netting and merging functionality in addition to the ability to perform their own best FIX allocation. This coupled with the work we’ve done on FIX allocation has made us a clear leader in this space.”

In options, FlexTrade solidified its position with the integration of Derivix analytics into its platform. (FlexTrade acquired Derivix in 2012.) “By combining Derivix’s widely regarded pricing and analytics capabilities with FlexTrade’s cutting-edge algorithmic tooling, our users have been able to create a best-of-breed solution for trading complex options strategies,” said Benincasa.

FlexTrade also continued to improve its analytical abilities through its TQM product. “The trend has been to get TCA for FX, and we’ve adapted our FlexTQM product for this purpose,” Benincasa said.

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