BidFX, a provider of cloud-hosted electronic trading solutions for the foreign exchange markets, has launched BidFX Data and Analytics to complement its existing EMS, risk and compliance modules and TCA offerings. The new Data and Analytics suite has been designed to give clients a comprehensive view of the pricing, market impact and liquidity for every transaction,
BidFX Data & Analytics will enable banks, hedge funds and asset managers to manage the collection and cloud storage of their own specific liquidity streams, and to monitor composite rates across multiple FX products. “We collect and store the pricing that each liquidity provider (LP) streams to its clients, and make that data available via an API,” says Daniel Chambers, BidFX’s Global Head of Data and Analytics, who joined the company in October 2020 from Sequoia Capital. “I know from my previous role that significant resources are required to collect, store and manage that sort of data and it’s neither easy nor cheap.”
Data collection is just one part of the puzzle, Chambers says. “The second part is, how to interpret that data? So we provide analytics that allow the client to monitor its different LPs, comparing spreads to each other, how much time each LP spends at top of book, where one LP sits on average versus another at a particular time of day, or versus a few months ago, and how that is evolving. That’s really useful information for clients when determining how they interact with their different LPs.”
As part of the new suite, BidFX also calculates composite pricing from a number of contributing prices in spot, emerging market and NDF currency pairs. “There are a number of applications for the composite pricing,” says Chambers. “First, it provides an independent benchmark for clients to see how the pricing they receive compares to the rest of the market. But it’s also very useful for when clients want to back test or stress test, or value their portfolios.”
Clients are now starting to incorporate information from the Data and Analytics suite into their execution algorithms, and using it to provide feedback to their LPs, says Chambers. “As well as being able to analyse things on screen, we provide clients with the ability to export and share those analytics with their LPs, which creates a valuable feedback loop,” he says.
The company plans to continue enhancing its analytics offerings, says Chambers. “This initial release offers various ways for clients to analyse their executions, but we will also be releasing more advanced TCA and liquidity provision analytics, which will give clients additional tools to manage their liquidity pricing and costs”.