Tuesday, 10 April 2012

MiFID : Will EU Banks now want Spot Forex regulated ? (spreads between bid and asked are narrowing at 9 percent a year)

Investors_europe_coat_of_arms_

http://www.institutionalinvestor.com/Article/3007947/HFT-Pushes-Small-Banks-Away-from-Major-Currencies.html?  

'

HFT Pushes Small Banks Away from Major Currencies'

'THANKS TO THE RISE OF HIGH FREQUENCY TRADING in foreign exchange markets, many smaller banks have found themselves squeezed out of buying and selling major currencies like the euro and the British pound. Those banks are concentrating on higher-profit trades in emerging-markets currencies and developing other businesses where they have a competitive advantage.

High frequency traders have had the same effect on foreign exchange that the conversion from eighths to penny increments had on equity trading, says Marc Chandler, global head of currency strategy at Brown Brothers Harriman & Co. in New York. Major currency pairs now get quoted to an extra decimal point. For combinations such as the U.S. dollar and the euro, that means banks are trading on thousandths of a euro cent.

“We found that spreads between bid and asked are narrowing at 9 percent a year, and high frequency trading is accelerating that process,” Chandler says. “We have to grow our volume by 10 percent a year just to break even, which is harder and harder to do because it’s like compounding in reverse.” '

---


News Brought to you By:

investorseurope

745a Europort

Gibraltar GX11 1AA

T +350 200 40303

F +350 200 51795

Forex Brokers: http://boulle.co/forex_ie    http://boulle.co/DEMOFOREX  

Stock Brokers: http://boulle.co/client_ie     http://boulle.co/demoplatform  

FuturesBroker: http://boulle.co/futures_ie  http://boulle.co/futures_Demo  

Investors Europe, a stock, futures & forex broker regulated by the FSC. Read our disclaimers on spot forex, on the diffusion of third party products, news, services and U.S. Persons

★★★Social Infrastructure Planning and Digital Marketing Services by SEOextraordinaire★★★

Posted via email from Gibraltar Category 2 Residency

No comments: