Uniquely, the new service opens the market to trade FX Futures, comparing prices with the OTC market and is the first in
a series of new Futures pricing services.
Kalahari Limited, a leading provider of real-time pricing and analytics software for financial markets firms, is pleased to announce
the launch of its new FX Futures and Rates service, offering traders a significantly low cost opportunity to access
observable exchange prices and benefit from real-time Futures versus OTC market arbitrage opportunities.
This new service is the first in a series of new Futures/OTC comparison pricing services being introduced by Kalahari this
year. Other instruments include, MAC Swaps for US Dollars, Euro and GBP currencies and Gold Futures pricing, to coincide
with the new contracts being launched on the London Metals Exchange this June – all crossed with the OTC markets
– to follow soon after.
The FX Futures pricing service provides real-time pricing and comparison across exchange and OTC traded FX rates for
all traders, from individuals to banks, corporates, prop traders and hedge fund accounts. It builds out an FX swaps curve,
comparable to the OTC FX curve, using the liquid and observable prices available in the FX Futures contract. The FX Futures
benefit from depth of liquidity, being centrally cleared with reduced charges, the elimination of credit and counterparty
risk and offers new Outright and spread trading opportunities across the curve.
This new service is a further step in Kalahari’s endeavour to allow participates to capitalise on FX pricing innovation. It
opens a new and potentially huge marketplace for financial markets participants to access the front months of the FX forward
curve. As liquidity increases and the curve extends, Kalahari expects financial firms to use the market to hedge FX
exposure. Exchanges will benefit through greater access to new buyers and sellers, such as FX fund managers, interbank
FX traders, international asset managers, multinational corporations, speculators, day traders and individuals. It is, also,
ideal from a regulatory perspective since trades on the Futures Exchanges are completely transparent and cleared. Firms
now have the ability to trade, clear and report the whole lifecycle, wherever they are in the world.
A world leading exchange, offering one of the most diverse derivatives marketplaces, is one of the first customers of this
new service from Kalahari, and uses the FX Futures and rates pricing to bridge the gap in the market from OTC to exchange
traded FX, giving the exchange access to new participants.
Commenting, Graham Mansfield, managing director at Kalahari said “Historically there has been little uptake of the quarterly
International Monetary Market (IMM) dated exchange traded FX contracts, when compared to OTC FX Swaps which
continue to be one of the largest and most liquid traded markets and covers most currencies and maturities.”
“There is an increased interest in the monthly FX contracts and our new service will now provide those FX market participants
with visibility and comparison to all active FX contracts. The service calculates indicative calendar spreads and
merges these with actual interest from the exchange, these prices are compared to the equivalent OTC prices and signals
when there is an arbitrage opportunity,” he continued.
The service is available to all traders via web browser or via direct feed.
Kalahari’s FX pricing solutions have been at the forefront of the markets for more than 30 years. This new service builds
on the company’s existing state of the art solutions that combine advanced mathematics with a wide range of market scenarios.