GFI targets corporates for options pricing

The new service -- a scaled-down version of the firm's Fenics FX product -- is being launched in response to an increased focus on FX derivatives by corporate firms due to factors such as the need to accurately mark derivatives positions to market for accounting reasons, said Nicola Williamson, Fenics FX Online product manager. "Not everyone needs the full power of the Fenics desktop, so this provides greater accessibility."

Fenics FX Online, which is a subscription-based service, is based on the same data feed and technology as GFI's Fenics FX platform, but it offers several different methods to price options, said Williamson. "It has three different levels of pricing interface, which makes it more accessible to the lower end of the market and introduces them to the advanced methods necessary for options pricing," she told FX Week.

Each method is graduated in complexity to gradually bring users from a basic knowledge of FX option pricing to a position where they can define their own parameters directly. 'Price sheets' list standard option details for a quick insight into market prices for FX options; 'pricing wizards' offer a step by step guide through the pricing of vanilla options, and Fenics pricing applets allow the user to define parameters for a full range of exotic options and vanilla strategies for pricing. "The user enters a currency pair then goes through each parameter, at the same time populating the advanced pricing page. They can then click through from the advanced page or can begin again from a blank page, depending on the user's level," said Williamson.

As well as a price feed from GFI's broking desks, the new platform also uses the same pricing models and covers the full 20 currency pairs available on Fenics FX for vanilla and exotic options pricing.

The new service may also suit smaller regional banks, or market professionals who may not need the complexity of Fenics FX. "It would be useful for banks that want to get into options but do not want to make a large investment immediately," said Williamson. It could also be used as a risk management device in the back office, she added, and interest has already been expressed from existing Fenics users to use the simplified version as a visual aid to present ideas to clients.