Traiana, a provider of post-execution STP for the FX market, has announced it is working with technology firm Lava Trading, a trading solutions provider for the financial services industry, to offer Lava’s FX trading clients access to NetLink. NetLink describes itself as a post-trade netting service for the FX market which reduces the number of tickets processed in the back office of the FX prime broker.
Lava's OTC, listed and foreign exchange solutions are used by broker-dealers, including U.S. investment banks, as well as market makers, hedge funds and institutional investors. LavaFXR, the company's foreign exchange product suite, provides an offering in electronic foreign exchange trading, according to the company.
Built upon Lava's proprietary technology core, LavaFXR offers an ECN of live dealable prices, full depth of book, the ability to place bids and offers, anonymous trading, together with Lava's order types.
"We are very pleased to add Netlink 'efficiencies' to our Lava foreign exchange product suite," explains David Ogg, CEO, LavaFX. "The post-trade expertise provided by Netlink will strengthen our offering to customers and bring enhanced efficiency, anonymity and reliability for our customers' trading needs," he adds.
Daily traded volumes in FX are rising, while more FX organisations are trading smaller ticket sizes, but in greater numbers, through algorithmic trading. This puts increasing pressure on the back offices of the FX banks offering prime brokerage.
NetLink receives deals from the electronic platform and determines whether or not each deal is netting-eligible based on customer-defined parameters. The majority of FX trades are then processed and netted by NetLink, and then electronically confirmed to the prime broker's back office either as deal tickets or simply as payment records.
NetLink reports it has previously achieved a 95% reduction in ticket volume, effectively netting dozens of prime customer traders into single tickets. NetLink says it enables prime brokers to net trades their clients execute through Lava by currency pair at pre-defined points throughout the day.
"The most effective way for FX trading organisations to maintain their client service in FX is to invest in a ticket netting service," says Gil Mandelzis, CEO, Traiana.