AWARDS Best broker for currency options: BGC

The electronification of options has been inching towards an inflexion point over the past 12 months, with more and more complex products being priced on screen. BGC has been at the forefront of this trend, deploying its BGC Forex platform last year, following a technology upgrade, which enabled the broker to quote the full range of contracts in the options universe electronically for the first time. The push continued this year, with the broker switching on live, two-way bank streams.

BGC has been voted the winner of the Best Broker for Currency Options category at the 2017 FX Week Best Banks Awards.

“Since we have moved to our BGC Forex platform, we are able to put out all of our prices electronically,” says Danny LaVecchia, executive managing director for FX derivatives at BGC. “Now we can display all of our prices and other specifics on our screens, and we can accept banks streaming live two-way prices. That, to me, has been the significant change for us over the [past] 12 to 18 months.”

The migration of options to electronic venues has also been boosted by the imminent arrival of the second Markets in Financial Instruments Directive, which is expected to boost volumes traded on e-platforms.

But, in this new evolving market structure, fresh challenges can pop up. One such issue involves getting prices and information in front of customers, who have varying ways of looking at and consuming prices. Some banks want all of BGC’s and GFI’s prices aggregated, while others are just simply too wedded to the phone. Voice trading, in LaVecchia’s opinion, is not going anywhere soon.

In extreme markets we quote the price, you blink and it’s gone. I don’t think that in my time the market will see the voice go away

Danny LaVecchia, BGC

“Some clients, believe it or not, would prefer to still hear prices by voice. In down markets, when it is not whipping and driving, participants want to see the prices electronically or via chat. In extremely volatile markets, they prefer voice,” he says.

“The reason being: in extreme markets we quote the price, you blink and it’s gone. I don’t think that in my time, the market will see the voice go away. When I say electronically, it could go to 70% and you could still have a significant role for voice,” he adds.

But the broker’s customer base is also changing, with more hedge funds getting involved in the traditionally bank-dominated options space. 

“It’s a pretty open market and one of the new frontiers is managing the ability to on-board hedge funds,” LaVecchia says. “It has taken this long to finally start to do business with a hedge fund in the market. It is well known that we deal with a hedge fund and the market welcomes the liquidity.”