Finance Feeds was present at TradeTech FX USA 2022, which took place at the Eden Roc Resort in Miami.
The conference brought together top FX and buy-side portfolio management officials as part of the return to face-to-face events since the start of the pandemic.
Contrary to what one might expect from a global economy in the throes of a pandemic, the forex industry has not slowed down. Quite the contrary, in fact, and attendees gathered in Miami to learn and discuss industry news, innovation and other pressing issues.
FinanceFeeds Editor-in-Chief Nikolai Isayev was fortunate enough to set up an interview with Phil Weisberg, Senior Vice President of Strategic Planning and Partnerships at oneZero Financial Systems, the multi-class trading technology provider of assets that enable financial institutions and brokers to compete in today’s world. – developments in world markets.
Phil Weisberg noted that many of the conference themes focus on automation, the best use of data and analytics, but they always end with the underlying of the FX business: the relationship with clients. and sources of liquidity, because it’s all about making everything as efficient as possible.
oneZero is an interesting case among FX technology providers, as its hands-on approach and out-of-the-box thinking has made the difference in becoming one of the leading fintech companies within the FX industry.
Weisberg explained how oneZero built one customer relationship at a time. “They saw what was in the industry. They thought that was insufficient and they worked closely with customers one by one to build great technology solutions.”
“One of the keys to success is the core DNA of the company: essentially video game programmers who don’t come from finance. They had no preconceived idea of how the market should be structured, how the technology should work.
He went on to point out that one of the really unique things about onzero is that software developers had to program video game machines like the Xbox. They are able to do things with less and pack a lot of analysis and processing into a relatively small hardware footprint. This translates into cost savings for our customers.”
Until a few years ago, oneZero employees focused exclusively on the retail industry, but the company has now expanded its focus to include institutional participants. That’s why oneZero recently onboarded several former veteran FXall/Refinitiv executives into key roles in product development, design, and legal.
Working with the retail industry has led the company to develop the capabilities to process more than one asset class and millions upon millions of tickets, all automated.
“These skill sets can be applied to the institutional forex market. In order to adapt to the system and communicate properly with customers, we wanted to increase some of the domain expertise in this type of market, but the core of our technology and operations team are the same.
Market data has become a key element in today’s FX industry, but the fragmentation built into multi-asset trading is a challenge brokers face and oneZero responds to.
“Our systems are able to handle listed products – which are mostly symbol driven and there are a finite number of symbols and very specific order and execution rules – with OTC markets, with an infinite variety of symbols and freedom in terms of market structure,” Weisberg explained.
“We’re able to integrate flows from the futures and spot markets as well as the wealth from the OTC markets where you can’t really go to a central exchange and get a better deal and a better deal. He does not exist “.
“Being able to juxtapose listed markets with OTC markets is really helpful for our customers and they basically can’t give two systems to their end users. They need to track their position, their P/L, their margin, on all of that.
Basically, customers who choose oneZero are those who need integration across asset classes.
By the way, this is something that we see as a trend in institutional markets because futures are a substitute for cash, but if you have a system that only deals in cash, that doesn’t determine which is the best way to mitigate your risk: futures or cash.
Nikolai Isayev then asked about the recently launched “last look” analysis tool at a time when the level of FX counterparties using the method has reportedly fallen since the introduction of the Global FX Code of Conduct.
Phil Weisberg started by saying that last look is an attribute of a trading protocol, it can be used as a beneficial tool but can also be used problematically.
“Not all last look uses are negative, but when you shed light on how they are used, you help ensure that your clients who use the last look trading protocol are aware of the number of options they are giving the LP in order to fulfill the order and you help them understand if he is a net profit or not.
“If you give a wider last look window but receive pricing on larger quantities and the fill rate increases, that could be a net benefit,” he explained.
“People were comparing two prices with different last look windows and they weren’t keeping track of what would happen if they were rejected. For our clients, we can track on their behalf automatically when they are rejected and what the cost of that rejection is, theoretically. So it is not enough to know that you have been rejected, you have to understand how it cost, then you can compare the rejected results with a firm liquidity protocol which will inevitably have higher prices.
“So when you look at the two results side by side, you can then make an adjustment in your aggregation system that will help adjust a last look price on a firm equivalent basis and giving customers the option to do so at within their aggregator, after making decisions based on the data, they can more easily compare prices with the last look and prices without the last look.”
oneZero has relationships with a number of market data redistributors, but it is up to customers to purchase market data and have an arm’s length relationship with the data provider.
“We are not in the middle. They choose what works best for them, and then we integrate with that redistributor so that customer data flows within their trading hub. Depending on a customer’s needs, this can influence which vendor is best for them,” Weisberg said, pointing to a few recommended vendors.
“Some people need a very large dataset, in which case Refinitiv can be a good choice. Sometimes people need alternative datasets, so we have integrations with others like QuantHouse. And then there are other market data providers like ACTIV, which have great pricing and value propositions for the retail forex industry.
The oneZero executive added that the company also provides access to market makers, as a first provider will often provide market data to clients. Clients must choose whether they want to source data from the same entity or create their own liquidity function with data from the liquidity source, then they edge their CFDs with listed products.
As we neared the end of the interview, Phil Weisberg spoke about what’s in store for 2022 and beyond. In the case of oneZero, it’s the challenge of integrating data analysis and trading.
“In many cases it’s a separate silo and it doesn’t drive direct results for the trading system. We plan to integrate these two elements so that current market conditions can influence your trade routing and hedging decisions as the market moves, whether it is a short-term move, episodic or predictable around non-agricultural wages.
“If you want to change your liquidity function to a high volatility setting, you need to know who is doing better in those circumstances, know when you are in that situation, and toggle the liquidity regime. We are able to do that. do at oneZero”.
OneZero’s next feature looks promising. We at Finance Feeds will be there to cover the product launch.