Financial Services firm Credit Suisse made its algorithms available in the foreign exchange (FX) space last week. Credit Suisse’s Advanced Execution Services (AES) desk is one of the first to offer FX algorithms to external clients. “We have leveraged off our existing equities technology and support infrastructures to offer FX on a global scale,” says Chris Marsh, head of AES trading and product development in Europe, Credit Suisse.
“We have designed our algorithms to locate liquidity very quickly. You would expect the world’s largest marketplace to be very liquid but the fact is that there is a mirage of liquidity and you actually face a fragmented, illiquid and opaque trading arena. AES FX algorithms give our clients the tools to combat this as well as take control of their overall execution risk and benchmark their own performance,” comments Marsh.
Trading in the FX marketplace can be inefficient and less competitive without the correct technology. “This is the perfect environment for algorithms since they provide traders with access to multiple liquidity venues,” says Jonathan Wykes, head of sales for AES FX IN EUROPE, Credit Suisse. Finding multiple liquidity pools has proven to be a big challenge in developing algorithms for FX to date.
Credit Suisse’s spot-desk has increasingly used AES’s FX strategies and has benefited clients by adding a significant upside to its performance, according to Wykes.
“The benefits of using algorithms in this space is to increase trader productivity and reduce market impact by automating trading as well as improving execution performance and reduce spread costs,” says Wykes.
The last few weeks have seen a roll-out of the FX strategies to a number of early adopters and although available to all market participants, are more likely to attract larger corporate clients than small FX retail users.
The most popular AES tactics for FX include Credit Suisse’s Guerilla and Sniper, which underpin the markets’ desire to trade quickly and anonymously in the market, while quickly capturing liquidity.