As volumes increase and margins tighten with increasing fragmentation across FX trading venues, the business challenge is to balance competitiveness in pricing with rigor in managing risk. Diverse customer profiles across multiple distribution channels demand targeted, tailored pricing to achieve satisfactory fill rates. But high turnover must not be at the cost of profitability and compliance, so insights and vigilance are necessary for accurate pricing and informed position keeping and risk management. Factoring in the need for millisecond turnaround times and it becomes a significant processing challenge, and certainly not one that can be managed manually. Consider this being the case under ‘normal’ market conditions, let alone during times of increased volatility or market spikes where immediate actions are needed to balance positions and control risk. That’s why KX have extended their pricing and automated risk management capabilities in their latest release of KX Flow along with additional connectivity enhancements.
KX Flow provides flexible mark-up capabilities for pricing by instrument, tenor and customer tier across both ESP and RFS, from either manual configuration or from external rates. Distribution via Single/Multi Dealer Platforms (SDPs, MDPs) and APIs enables further customization of prices based on clients and their selected communication channels, leading to increased fill rates and profitability.
Delivered as a module of KX Algo, KX Flow includes a sophisticated smart order routing engine for either warehousing or auto-hedging positions, using a range of order types and execution strategies. Automated position management and hedging strategies can now be configured individually across multiple books based on a range of parameters including P/L, position and trade size. All rules can be amended in real-time for maximum flexibility in responding to volatile conditions, enabling real-time response to market conditions and improved risk management.
Interface updates to Refinitiv FXAll, Bloomberg FXGO and Deutsche Boerse 360T now make it possible to configure markup by individual channel and to treat ESP and RFS separately on MDPs, giving greater control on price distribution and improved targeting by customer.
Complementing KX Flow in providing a complete eFX trading suite are KX Algo, for algorithmic trading and risk management, KX Surveillance for detecting trading anomalies and prohibited trading techniques aligned to the FX Global Code, and FX Analytics for both pre and post-trade profitability and liquidity profiling analysis. Each can be deployed either on-premise or in the cloud. For more information on KX FX Trading please visit our website.