Case Study: Pooling currency market liquidity

Global FX markets are fragmented with multiple sources and forms of liquidity.

Working for a major hedge fund, we explored opportunities for aggregating FX liquidity pools from various sources.

Utilising API feeds from bank portals and electronic communication networks (ECN’s) enabled the implementation of an FX aggregation application, this ensured the fund was transacting in the currency markets at the most favourable terms.

Understanding and managing liquidity pools are essential to achieving best execution outcomes for both buy and sell-side organisations. The hedge fund was able to achieve significant savings through sourcing competitive pricing, minimising market impact and reducing execution and slippage costs.