Futures Comes to FX

Terry Flanagan

Futures and FX may be considered separate asset classes, but as the trading function increasingly becomes multi-asset, trading systems must be capable of handling both. That means being able to source liquidity and connect to exchanges and FX brokers worldwide.

CQG, which provides trade routing, global market data, and advanced technical analysis, has launched CQG FX, a product tailored to the requirements of CQG’s FX trading customers, and is also providing access to greater liquidity through an agreement with DirectFX, a large FX broker.

The objective is to deliver global market coverage as well as specific tools to address particular trading needs.

“Desk space is at a premium,” said Mike Glista, CQG’s director of order routing and vice president of Continuum. “Instead of a trader needing to know how to work four systems, he basically needs to learn one. If you’re running analytics on CME [currency futures], why wouldn’t you want to also do it against FX? Do you want to be pigeonholed into one asset class, or do you want to operate across multiple asset classes?”

DirectFX will use the Delta Flow product from First Derivatives to provide FX rates and order management capabilities to CQG clients using their existing trading screens.

“We are confident that the inclusion of the strong FX price/execution capability being provided by the brokerage firm will represent a powerful addition to CQG’s multi-asset client trading environment,” DirectFX’s CEO Joe O’Mara said in a statement.

Delta Flow provides direct access to liquidity sources including market-making banks, non-banks and ECNs providing pricing and execution for FX, NDFs, metals, CFDs and other OTC instruments. Delta Flow supports retail, institutional and high-frequency trading client segments.

John Beckert, managing director of eTrading and risk management at First Derivatives, said in a release: “First Derivatives is excited to be partnering with CQG and DirectFX to provide the underlying technology solution supporting the integration of DirectFX’s best of breed foreign exchange pricing and execution into CQG’s world class multi-asset class trading environment.”

For CQG, the partnership enables its FCM customers to expand their FX capabilities. CQG partners with more than eighty FCMs and provides Direct Market Access to more than forty exchanges through its global network of co-located hosted exchange gateways.

“We’re taking the that we’ve had in futures for ten years and starting to go into the FX arena to be a lot more multi-asset class capable,” said Glista. “Instead of other asset classes coming into futures, we think of ourselves as a futures software company that’s starting to reach out into other asset classes.”\

Feature image via iStock

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