OTC Trader enables brokers in illiquid OTC asset classes such as commodities, metals and energy to provide prices electronically to multiple clients simultaneously. Clients can respond or request specific quotes and negotiate trades online. The IM presence information enables users to see other traders who are online and to trade with them electronically.
Brokers can white-label the new OTC Trader solution for distribution to their trading counterparties.
OTC trades are privately negotiated contracts between two counter-parties often with a number of cross-market components. In recent years these markets have seen substantial growth in volumes and now represent a significant revenue stream for institutions trading in the OTC markets. Unlike well-defined exchange traded instruments such as stocks, each trade can be unique and only be processed by communicating and exchanging all the economic components of the trade.
ePulse uses its eML (advanced eMarkets Library), a set of over 250 generic components that are used to construct instrument types and define processing rules. With eML new transaction types can be easily added. It enables the OTC Trader system to be quickly enhanced and dramatically reduces the time to market for new product types.
Barry Patel, Sales and Marketing Director of ePulse, commented "We are targeting the OTC markets, as this sector has been poorly served by system vendors in the past due to the complexity of the transactions. Our approach, using our proven Instant Messaging technology as a delivery vehicle will help improve the liquidity in certain markets as we provide an enhanced price discovery mechanism".
OTC Trader is built on the popular ePulse Messenger SE (Second Edition) and features a technology overhaul that has made the front-end interface even easier to use, providing both Basic and Advanced levels of functionality. Basic mode, a default Yahoo! style interface, for traders who want simple functionality, to familiarise them with using the IM technology to trade. Advanced mode includes the capability to create tiered pricing levels according to clients within different IM groups, and to launch pre-populated trade order tickets direct from ePulse's trading window.
"OTC trader was launched in London and New York last week with a number of users, including commodities traders at four existing clients, a mix of banks and brokers in London, as well as four new customers who have adopted the product in this latest release" Patel says. "The new clients are all London-based brokers that are using ePulse Messenger for pre-trade price distribution and negotiation" he adds.
Tony Moulange, a Consultant at ePulse said, "The OTC industry is evolving swiftly. As the global markets expand new factors such as the emergence of Credit Derivatives and the rise of the far eastern economies, there is an ever greater need to better manage risk and exposure".