Uniquely, the new service opens the market to trade FX Futures, comparing prices with the OTC market and is the first in a series of new Futures pricing services
Kalahari Limited, a leading provider of real-time pricing and analytics software for financial markets firms, is pleased to announce the launch of its new FX Futures and Rates service, offering traders a significantly low cost opportunity to access observable exchange prices and benefit from real-time Futures versus OTC market arbitrage opportunities.
This new service is the first in a series of new Futures/OTC comparison pricing services being introduced by Kalahari this year. Other instruments include, MAC Swaps for US Dollars, Euro and GBP currencies and Gold Futures pricing, to coincide with the new contracts being launched on the London Metals Exchange this June – all crossed with the OTC markets - to follow soon after.
The FX Futures pricing service provides real-time pricing and comparison across exchange and OTC traded FX rates for all traders, from individuals to banks, corporates, prop traders and hedge fund accounts. It builds out an FX swaps curve, comparable to the OTC FX curve, using the liquid and observable prices available in the FX Futures contract. The FX Futures benefit from depth of liquidity, being centrally cleared with reduced charges, the elimination of credit and counterparty risk and offers new Outright and spread trading opportunities across the curve.
This new service is a further step in Kalahari’s endeavour to allow participates to capitalise on FX pricing innovation. It opens a new and potentially huge marketplace for financial markets participants to access the front months of the FX forward curve. As liquidity increases and the curve extends, Kalahari expects financial firms to use the market to hedge FX exposure. Exchanges will benefit through greater access to new buyers and sellers, such as FX fund managers, interbank FX traders, international asset managers, multinational corporations, speculators, day traders and individuals. It is, also, ideal from a regulatory perspective since trades on the Futures Exchanges are completely transparent and cleared. Firms now have the ability to trade, clear and report the whole lifecycle, wherever they are in the world.
A world leading exchange, offering one of the most diverse derivatives marketplaces, is one of the first customers of this new service from Kalahari, and uses the FX Futures and rates pricing to bridge the gap in the market from OTC to exchange traded FX, giving the exchange access to new participants.
Commenting, Graham Mansfield, managing director at Kalahari said “Historically there has been little uptake of the quarterly International Monetary Market (IMM) dated exchange traded FX contracts, when compared to OTC FX Swaps which continue to be one of the largest and most liquid traded markets and covers most currencies and maturities.”
“There is an increased interest in the monthly FX contracts and our new service will now provide those FX market participants with visibility and comparison to all active FX contracts. The service calculates indicative calendar spreads and merges these with actual interest from the exchange, these prices are compared to the equivalent OTC prices and signals when there is an arbitrage opportunity,” he continued.
The service is available to all traders via web browser or via direct feed.
Kalahari’s FX pricing solutions have been at the forefront of the markets for more than 30 years. This new service builds on the company’s existing state of the art solutions that combine advanced mathematics with a wide range of market scenarios.
Kalahari’s best-in-class pricing engine provides accurate real-time prices and calculations across markets in more than 60 different currencies, including G10 Europe, the Middle-East, Asia and Latin America and all the associated crosses. This unique capability to link a wide variety of different markets and prices across the globe. From single desk installation to organisation-wide multi-regional systems users can choose from multiple sources of real-time live data to be used in pricing curves, allied with advanced aggregation methods ensuring confidence and consistent pricing.
The state of the art systems combine advanced mathematics with a wide range of market scenarios. They incorporate, for example, event-driven curves to provide consistent and reliable prices on standard and non-standard trades. Prices are displayed in real-time and can be distributed to all methods of execution – whether it is voice trading, electronic trading, ecommerce, publishing and compliance.