A foreign exchange aggregator or FX Aggregator is a class of systems used in
Forex trading
The foreign exchange market (Forex, FX, or currency market) is a global decentralized or over-the-counter (OTC) market for the trading of currencies. This market determines foreign exchange rates for every currency. It includes all as ...
to aggregate the
liquidity
Liquidity is a concept in economics involving the convertibility of assets and obligations. It can include:
* Market liquidity, the ease with which an asset can be sold
* Accounting liquidity, the ability to meet cash obligations when due
* Liqu ...
from several liquidity providers.
Aggregators usually provide two main functions; they allow FX traders to compare price from different liquidity venues such as banks-global
market maker
A market maker or liquidity provider is a company or an individual that quotes both a buy and a sell price in a tradable asset held in inventory, hoping to make a profit on the '' bid–ask spread'', or ''turn.'' The benefit to the firm is that ...
s or
ECNs like
Currenex,
FXall or
Hotspot FX and to have a consolidated view of the market. They allow traders to trade with many participants using a single
API or a single
trading terminal. Some of the systems support order sweeping (an order is split into the chunks which are sent to the respective counterparties based on the price, time and other attributes of the quotes from these counterparties), other systems route the whole order to a single liquidity provider who is chosen by an order routing algorithm embedded into an aggregator.
Technology
FX Aggregator implementation is complex as the technology needs to be fast (Latencies in microseconds) and flexible.
Some banks developed their own FX Aggregators and others bought existing products from technology vendors.
Aggregators
There are many aggregators offered in the market: smartTrade LiquidityFX, Thomson Reuters Dealing Aggregator, Liquid-X, Liquidity Pool, FlexTrade,
BidFX, Quotix, Integral, Currenex,
LMAX Exchange, MarketFactory, EBS Direct, DealHub, Seamless FX, Gold-i Matrix and others.
References
{Reflist
Foreign exchange market
Financial software
Electronic trading systems