Trading systems provider TORA has launched a new tool that allows for FX auto-hedging in equity pairs trading.
TORA said the new service, which sits within its algo suite and provides automatic hedging for cross-currency pairs and equity derivatives trading, will offer greater trading efficiencies for clients with a single holistic view of all transaction information.
The system will capture all transactional information on pairs orders within the TORA order and execution management system (OEMS), and eliminate the need for a separate system to manage corresponding FX risk.
“We are really excited about our new equity pairs FX auto-hedging capabilities,” said TORA chief executive, Robert Dykes. “The new functionality will enable superior operational efficiency by helping risk arb traders to easily currency hedge their pairs trading in one completely automated system.”
TORA added that using several applications was too time consuming and could result in imperfect FX hedging or operational risk of mis-hedging. Clients can use the new tool to manage risk on pairs orders with improved levels of granularity and with a variety of aggression levels and execution styles.
“We made the new solution incredibly easy to use,” said Ovidui Campean, global head of product at TORA. “All the trader needs to do is select the FX base currency and counterparty from an intuitive dashboard. As the equity orders begin to fill, the algo calculates the live FX exposure and creates orders to maintain the FX hedge.”
“An added benefit of the solution is that the trader is not tied to executing the FX hedging orders with the same broker as the equity orders.”