Barclays Capital, the investment banking arm of Barclays Bank, has enhanced its recently launched algorithmic trading tool for FX trading. The tool is called PowerFill Orders, and is available on the firm's BARX execution and post-trade platform.The first phase of the product, called PowerFill, was launched in November, which introduced the concept of algorithmic trading by allowing traders to break down orders into smaller sizes and view (via a "PowerFill" bar graph) market impact.
The new tool PowerFill Orders allows clients to further customize orders with more options. Clients can determine if they want to execute trades passively or aggressively, or if they want to use a VWAP or TWAP algorithm. They can also set parameters for speed, size and price, notes John Caccavale, a former FX traders who now is managing director and Head of North American Ecommerce, at Barclays Capital.
PowerFill allows clients to break down larger tickets into small orders offering less market impact, he says, a form of trading which has already been widely adopted in the equities market. One of the new additions to Barlcays' system is a tool called PowerFill Price Improver (PPI), which will fill the client's order at a better rate then the price specified, if it is available. In addition, as an order is being executed, the system shows the average price of execution. The minimum order size for algo trading is a half of a million and the largest is 200 million.
The FX market has traditionally traded using a request for quote model. BARX offers streaming quotes, where each quote is immediately executable, but there is an option to revert to a request for quote model, if the client desires for certain trades.
Caccavale says PowerFill Orders is unique because it offers the client control over the size, price and speed of an order, as the client can customize their parameters. The system also enables a trader to aggregate trades into a single ticket, which saves on back office fees, notes Caccavale. The system's anonymity, no one can see the client's order book, and the fact that it is offered to clients at no charge, are also unique aspects, he says.
As for competitors, Caccavale says the system competes with the algorithm aggregators like Flextrade, Portware, and ProgressApama.
The FX world is behind the equities space when it comes to electronic trading, but Caccavale says he believes it won't be long until FX trading is mostly electronic and is using algorithms more readily. At Barclays, 85% of FX trading is done electronically now, and that is done on the BARX system.
The BARX platform is moving toward becoming a multi asset platform. According to Caccavale, multi asset trading is the future of trading and it is up to technology providers and investment banks to provide the technology to allow clients to reach that goal. BARX offers electronic execution and other pre-trade and post-trade services across fixed income, foreign exchange, futures, commodities, equities, money markets and structured products.
The system offers 27 streaming currency pairs and was created to service various customer types including hedge funds, broker-dealers, CTAs and banks. BARX was built inhouse.Barclays Capital, the investment banking arm of Barclays Bank, has enhanced its recently launched algorithmic trading tool for FX trading. The tool is called PowerFill Orders, and is available on the firm's BARX execution and post-trade platform.