Forex und Währungsfutures: Zunahme des elektronischen Handels

Reuters
Electronic FX trading bolsters CME currency volume
Friday May 9, 12:04 pm ET
By Kyle Peterson

CHICAGO, May 9 (Reuters) - A growing wave of interest in currency trading on electronic platforms has hit the Chicago Mercantile Exchange, driving foreign exchange futures to record high volume in March and to hearty levels all year so far.

Many investors believe electronic foreign exchange, EFX for short, is a safer and less expensive alternative to traditional trading in open outcry pits on exchanges and telephones used on the $1.2 trillion a day over-the-counter market.

"Our focus is on beefing up electronic trading in all markets, including FX," said Alan Zavarro, head of global futures at ABN Amro Clearing and Execution.

"We want to encourage electronic trading as much as we can, because it permits straight-through processing and economic efficiency," he said. "It applies a little more to FX, because it's a whole lot easier, if you have a market that's smaller, to move it upstairs."

Of the CME's four product groups, currency products rank third in volume behind equity indexes and interest rates.

CME data shows volume in FX futures trade reached 3.1 million contracts in March, a record monthly high and a 35 percent gain over March 2002. Of those March 2003 contracts, 1 million were on Globex, the CME's electronic trading platform, up 117 percent from March 2002.

FX futures volume in April, however, was only 2.2 million, though still a 38 percent gain over April 2002. But May 7 saw record daily volume of 77,236 FX contracts trade on Globex.

Banks like ABN Amro think the future of futures is electronic. Zavarro said that in the last year ABN Amro added 15 staff members to handle electronic trading at the CME and the Chicago Board of Trade (News - Websites).

Meanwhile, the bank says its FX floor presence has dwindled to two or three employees. But Zavarro noted a hefty presence on other trading floors, such as CME Eurodollars, which still sees nearly all of its trade in open outcry pits.

GLOBEX INCREASINGLY ATTRACTIVE

CME officials linked the jump in electronic futures trading volume to "side-by-side" trading. Initiated in 2001, side-by-side allows simultaneous trade in open outcry and on Globex. That means a trader can buy euro futures in the pit and sell them on Globex, linking the liquidity of the platforms.

Officials also said Globex has become faster and more reliable, giving dealers greater incentive to trade there.

"We've done a lot to improve the confidence here, so Globex is faster and more stable than it ever has been," said Rick Sears, CME managing director of foreign exchange. "That has allowed these automated trading systems the confidence to make tighter prices and larger amounts on the bid and offer, which ... attracts increasingly larger players and makes people increasingly confident."

VOLUME GROWS, ADOPTION SLOWS

Data from Greenwich Associates, a research and consulting firm, show that a quarter of foreign exchange users are trading online, up from 17 percent last year. But Greenwich predicted a slower adoption rate by firms which have yet to try EFX.

"The slowdown in uptake is increasing because you had a massive round of publicity where EFX became the flavor of the day," said Peter D'Amario, consultant at Greenwich. "The most likely users of the product have been saturated," he said. "What used to be a large group of undecideds have decided. As every year goes by now you're going to see the uptake slow."

Most online portals such as FXall, Currenex and FX Connect are reluctant to give volume statistics. But last month, FXall, launched in 2001, said average daily volume in March topped $7.5 billion. Although it did not give a figure for March 2002, chief executive Phil Weisberg said business was up.

D'Amario said that while electronic trading took root first and fastest in interest rate trade, FX is uniquely suited to computer trading. Trades are simple, he said, compared with other markets such as Eurodollars, which some traders say have too many variables for easy electronic dealing at this stage.

He said the volume of EFX trade, both on exchange and off, has grown largely because traders perceive it to have fewer steps and faster execution. D'Amario also noted that smaller OTC brokers can use EFX to gain access to a greater number of counter parties than they could reach by telephone.

He said, however, a large group of holdouts maintain that the speed of EFX trading increases the risk of error. Those dealers fear that if they tap the wrong key in entering a trade, they won't be able to correct it before execution.

Other brokers aren't convinced that electronic trading platforms are as secure as they purport to be and fear their positions could be visible to others, he said.