Best Online Foreign Exchange Trading Systems

By Gordon Platt



State Street’s Currenex

The Currenex foreign exchange trading platform uses patented technology to match orders and aggregate liquidity. Its high-speed, low-latency API (application programming interface) provides access to live, streaming bids and offers that are available for instant execution. In addition to linking market makers directly to traders, Currenex offers an anonymous central counterparty service.

The aggregation technology of Currenex offers access to multiple sources of liquidity. Integrated with more than 60 global banks, Currenex connects users with selected counterparties on a single trading venue with more than 100 currency pairs. The system supports spot currency, forwards, swaps, loan and deposit instruments, as well as trading in gold and silver.

Last year the average daily FX trading volume on Currenex tripled in the Asia-Pacific region. Across all regions, volume increased by 23% in 2010. Recent innovations include the launch of Currenex Ouch, the first FX adaptation of the Nasdaq protocol for submitting orders, and Currenex Itch, based on the Nasdaq market-data feed. Used together, these protocols provide what Currenex says is the fastest method for data transfer in foreign exchange.

Currenex is the high-speed exchange destination for the most active traders. It maintains a primary data center in New Jersey, with secondary data centers in Chicago, New York, London and Tokyo, managed by different service providers. These facilities are critical to curtailing slippage and providing maximum control over order routing to ensure speed of execution. Slippage is the difference between the price at which a trader places an order and the price at which it is actually filled.



FXall is the leading multibank foreign exchange platform, with more than 1,000 institutional clients and a presence in more than 65 countries. FXall has experienced consistent growth since it was formed in 2000. In the first half of 2011, its average daily trading volume was $81.4 billion, up from $37.5 billion as recently as 2006.


Weisberg, FXall: We recognize that different client segments within the FX market have varying needs depending on their strategic objectives and priorities

On July 27, 2011, the platform experienced record daily trading volume of $140 billion, as markets were volatile amid a deadlock in US debt-ceiling negotiations.

“[We] recognize that different client segments within the FX market have varying needs depending on their strategic objectives and priorities,” says Phil Weisberg, CEO. “At FXall, clients can execute their FX transactions using a number of different methods and workflow solutions.”

Its clients include asset managers, banks, broker-dealers, corporations, hedge funds and prime brokers. FXall is a neutral partner with its clients and never trades as a principal. More than half of its trading volume comes from customers outside of the US.

FXall’s proprietary platform enables efficient and reliable FX price discovery, trade execution and pre-trade and post-trade workflow solutions for more than 400 currency pairs. It recently added trading of deliverable offshore Chinese renminbi (CNH) through its QuickTrade request-for-quote product. Many of FXall’s liquidity providers are now quoting CNH over-the-counter trades.

It has access to liquidity from more than 80 global banks and other market participants. Its products include FX spot, swaps, forwards and nondeliverable forwards (NDFs). The platform also supports OTC trading of gold and silver on a spot, forward and swap basis, and provides access to bank deposits. FXall plans to support both FX options and NDFs for trading through a swap execution facility, as required by the Dodd-Frank Act and Europe’s MiFID (Markets in Financial Instruments Directive). It will also support those trades that are not required to be executed on a registered facility.


Forex Capital Markets (FXCM)

Forex Capital Markets (FXCM), one of the largest global foreign exchange brokers, was one of the first online foreign exchange trading platforms to provide access to the interbank market. The FX market broker has approximately 156,050 active customer accounts that trade on its platforms in more than 180 countries around the world. It offers trading in about 56 currency pairs, as well as contracts for differences (CFDs) in the UK.

FXCM raised more than $200 million in its initial public offering on the New York Stock Exchange in December 2010. Since then, it has made selective acquisitions to expand its customer base. In March 2011, it acquired FXCM Japan, the retail foreign exchange business of GCI Capital. In September, FXCM Japan agreed to acquire Foreland Forex, a retail FX broker in Japan with more than 18,500 accounts.

“FXCM Japan is gaining critical mass in Japan, the world’s largest retail FX market,” Drew Niv, chief executive of FXCM, said in commenting on the acquisition. “This merger positions FXCM Japan to be one of the largest retail FX brokers in the Japanese market.”

Under its “no dealing desk” system, trades are executed back-to-back with major banks and financial institutions. When a customer executes a trade based on the best price quote offered by the platform’s market makers, Forex Capital Markets acts as a credit intermediary, or riskless principal, simultaneously entering into offsetting trades with both the customer and the market maker.

It earns fees by adding a markup to the price. It also generates revenue by executing spot foreign exchange trades on behalf of institutional customers through FXCM Pro.

The firm’s Trading Station II solution includes advanced charting and dash boards with customizable features, including technical analysis indicators, signal and alert functions, and the ability to place trades directly from a chart. Clients of FXCM are able to trade oil, gold, silver and stock indexes, along with foreign exchange.