[ T R A D E T E C H
F X
U S
2 0 1 9 ]
“The in-flight data
is where it gets
interesting, because
what if costs are way
worse that you ex-
pected?
JOHN RADLE, CAMPBELL & CO.
TRADING FIRMS SEEK
‘IN-FLIGHT’ TCA TO FLAG
POTENTIALLY BAD FX
TRADES
TRADERS EMPOWERED IF ‘IN-FLIGHT’ TCA COULD
FLAG WHEN TRADES AREN’T GOING AS PLANNED.
F
oreign exchange market par-
ticipants are seeking efficient
methods of alerting traders if an
ongoing transaction isn’t going
as planned using real-time, or
‘in-flight’, transaction cost analysis
(TCA).
Buy- and sell-side panellists
dissected the use cases of TCA data,
with pre-trade analytics allowing
firms to work out expected costs
of a trade, and post-trade analytics
showing the realised costs. The pan-
el agreed that in-flight data could
28 // TheTrade // Spring 2019
prove extremely useful in terms of
flagging issues with ongoing trades.
“The in-flight data is where it gets
interesting, because what if costs
are way worse that you expected?
It would be far more interesting to
monitor in-flight data so that you
could potentially flag when the
costs of a trade are deviating sig-
nificantly from what you expected,”
said John Radle, head of trading at
quantitative investment firm Camp-
bell & Co. “It’s hard to monitor
every single order so it’d be great to
be able to flag the trade and say let’s
get some eyes on this.”
Michael Babic, Americas head of
FX eCommerce sales at Goldman
Sachs, agreed with Radle, adding
that this is an area of focus for Gold-
man Sachs due to engagement from
clients on the development, and the
clear benefits such analytics could
provide for FX traders.
“We focus a lot of time on the
in-flight TCA where traders can be
empowered with being able to look
at how they are addressing prob-
lems in terms of what is happening,
versus your expectations before
you started the trade,” Babic told
delegates. “That’s where our clients
really want to engage, so that they
can be alerted if a trade isn’t going
as planned, and then they can do
something about it.”
Panellists also agreed that buy-
and sell-side firms simply don’t
have the bandwidth to monitor
every single trade in real-time, so
the need to be alerted if a trade isn’t
going as planned has become more
crucial.
“I would agree the more we can
move towards closing that loop
from the post-trade to intra-trade
environment, the better it will be
for everyone,” Holden Sibley, head
of Americas eFX distribution at
Barclays, added. “To get there will
involve the close dialogue that
Michael and John are talking about,
alongside an increasingly trigger
and alert-based mechanism.”