Post-trade solutions provider OSTTRA has partnered with SpectrAxe, the all-to-all marketplace for over-the-counter (OTC) FX options, to offer a comprehensive end-to-end service encompassing price discovery, execution, booking, and risk management for the OTC FX options market.
The partnership merges SpectrAxe’s central limit order book (CLOB) capabilities with OSTTRA’s extensive post-trade network, enabling full automation of the trading lifecycle and significantly reducing the time it takes to book OTC FX option trades.
“Although SpectrAxe only began trading earlier this year, in the six months we’ve been working with them, we’ve already onboarded a double-digit number of clients,” says Patrick Philpott, Product Design Lead, FX & Securities at OSTTRA, in conversation with TradingTech Insight. “Those clients, who were already part of the OSTTRA network for the delivery of FX cash or FX options, are an even split between buy-side firms and banks, along with some of the larger non-bank market makers.”
SpectrAxe claims to be the only electronic CLOB trading platform that facilitates all-to-all trading for OTC FX options. It allows hedge funds, proprietary trading firms, regional banks, and market makers to trade anonymously via their FX prime broker (FXPB) relationships in a transparent, lit marketplace. This moves the industry away from its traditional reliance on voice- and chat-based execution or single-dealer platforms.
“We are connected to multi-bank platforms like FXall and Bloomberg, single-dealer platforms, and dedicated FX options platforms such as Digital Vega,” says Philpott. “SpectrAxe and its clients benefit from the efficiency of a single point of connection to us, enabling access to all the institutions on our network.”
He continues: “The beauty of this collaboration lies in its efficiency. SpectrAxe has integrated with us as a publisher, establishing a single FIX connection. This allows SpectrAxe to send trades for any clients trading on their platform to OSTTRA, and we then distribute these trades onwards across our extensive network, which spans both tri-party and bilateral spaces and consolidates various FX middleware distribution components. This makes onboarding existing clients extremely straightforward. And clients can connect in different ways—some use FIX to FIX, while others use our voice affirmation platform for FX options.”
With the connection to the OSTTRA FX trade processing network, traders on SpectrAxe’s platform stand to benefit from real-time trade notifications booked directly into their risk systems. This addresses the critical need for automating FX option post-trade workflows to provide market participants with greater cost reductions and transparency.
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