XTX Markets releases new FX implementation shortfall algorithm

New principal FX execution algorithm from XTX Markets aims to reduce slippage on large orders for the buy-side.

Market maker XTX Markets has released its new FX implementation shortfall execution algorithm aimed at reducing the overall slippage to arrival place.

The single algorithm from XTX Markets includes a real-time visualisation function that allows traders to observe the market as an order is being executed. The principal FX algorithm will also allow users to adjust the speed or urgency of execution of an order while it is in progress, and set the limit prices.

“This product allows buy-side clients to benefit from our scale and market making expertise in FX,” said global head of distribution at XTX Markets, Jeremy Smart. “Our algorithm’s single aim is to measurably reduce the buy-side’s trading cost when patiently executing larger orders.”

XTX Markets added the algo is now available for eligible counterparties via its web GUI and API, with plans to support trading through major execution management system (EMS) providers and multi-dealer platforms.  

XTX Markets is also partnering with several partner banks to distribute the algorithm to corporate and real money clients in each of their core geographies.

The market maker stated it aims to achieve fills at better than mid-price on FX markets when trading two-sided volume through the use of its cross-asset alpha, which helps reduce adverse selection when trading.

In May, a report from JP Morgan found that clients were increasingly adopting adaptive FX algos at the height of the market volatility seen in March. The report from the bank’s FX eCommerce team showed that during the liquidity event earlier this year. adaptive order types surged to around 50% of algo order types, while limit-based orders declined to around 20%.