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How TraderTool's PriceOn Can Scale Up and Improve Your Business

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Retail FX Brokers can optimize their market making revenue in a far better way than just A book/B book. Five to ten times the P/L of an A book can be captured without taking the risk of a B Book. Holding inventory risk for minutes as opposed to hours or days, significantly lowers P/L variability.

PriceOn™ empowers dealers to maintain control by providing advanced capability to scale up their business and increase competitiveness. Dealers have access to a broad feature set meant for several specific use cases.

  • Separate by client, currency pair, size of trade, and time of day.
  • Implement hybrid strategies beyond A and B book that maximize P&L often missed by A book hedges while not taking the risk of B booking.
  • Customize tailored feeds to increase your client base and win business lost to larger, more competitive players.
  • Reduce reliance on outside counter parties. These often-one-way relationships can sometimes be fragile and sensitive.
  • Minimize hedging costs by placing passive bids and offers, driven from inventory to the market, capturing spread and becoming a valued firm skewed price market maker.
  • Increase trade yield by optimizing time to hedge each type of flow and implement strategies to maximize and capture spreads earned from this activity.
  • Use toxic flow to your advantage – passive bids and offers, driven from your inventory, can price flow once deemed unprofitable.
  • Opportunistic one-sided market making (or heavy skew) for prop trading P&L or execution of large customer orders.

A book/B book segmentation is not the optimal setup for a large segment of Retail FX Brokers. When analyzing flow profitability, many firms mix income from overnight financing with the spreads that user cross with that of P/L generated by market movement. Capturing the spread allows the dealer to further segment P/L on trades and differentiate the “VIG” capture from the risk of a position.

Where are the biggest opportunities?

  1. Commonwealth currencies crosses because of their relatively higher spreads. Spread capture plus rolls should amount to nearly 100% of the P/L that a typical B Book would capture with far higher consistency.
  2. Emerging Market currencies where there is often > USD300 per USD1million of value embedded in the spread alone. These currencies are typically attracting far more conservative leverage. Spread capture plus rolls results in a far higher revenue capture per trade than traditional B Book.
  3. One way commodity CFD instruments Metals (outside of gold), and Agriculturals, do not lend themselves to B booking and trade on high spreads, therefore, A book gives away too much of the potential economics.
  4. Crypto CFDs, and especially unleveraged crypto spot, particularly outside of BTC and ETH, is ideal for traditional market making spread capture and not B Booking.

PriceOn™ from TraderTools Inc. can customize an algorithmic solution to your flow, utilizing the same tools as a professional High Frequency shop, enabling your dealers the ability to take back control of the process. We have in-house quants and analysts, ready to help customize the PriceOn™ just for you.

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To learn more, reach out to my sale team at sales@tradertools.com , or directly to me at drewn@tradertools.com – The team and I are happy to describe this in greater details and discuss your flow and market place opportunities.

Retail FX Brokers can optimize their market making revenue in a far better way than just A book/B book. Five to ten times the P/L of an A book can be captured without taking the risk of a B Book. Holding inventory risk for minutes as opposed to hours or days, significantly lowers P/L variability.

PriceOn™ empowers dealers to maintain control by providing advanced capability to scale up their business and increase competitiveness. Dealers have access to a broad feature set meant for several specific use cases.

  • Separate by client, currency pair, size of trade, and time of day.
  • Implement hybrid strategies beyond A and B book that maximize P&L often missed by A book hedges while not taking the risk of B booking.
  • Customize tailored feeds to increase your client base and win business lost to larger, more competitive players.
  • Reduce reliance on outside counter parties. These often-one-way relationships can sometimes be fragile and sensitive.
  • Minimize hedging costs by placing passive bids and offers, driven from inventory to the market, capturing spread and becoming a valued firm skewed price market maker.
  • Increase trade yield by optimizing time to hedge each type of flow and implement strategies to maximize and capture spreads earned from this activity.
  • Use toxic flow to your advantage – passive bids and offers, driven from your inventory, can price flow once deemed unprofitable.
  • Opportunistic one-sided market making (or heavy skew) for prop trading P&L or execution of large customer orders.

A book/B book segmentation is not the optimal setup for a large segment of Retail FX Brokers. When analyzing flow profitability, many firms mix income from overnight financing with the spreads that user cross with that of P/L generated by market movement. Capturing the spread allows the dealer to further segment P/L on trades and differentiate the “VIG” capture from the risk of a position.

Where are the biggest opportunities?

  1. Commonwealth currencies crosses because of their relatively higher spreads. Spread capture plus rolls should amount to nearly 100% of the P/L that a typical B Book would capture with far higher consistency.
  2. Emerging Market currencies where there is often > USD300 per USD1million of value embedded in the spread alone. These currencies are typically attracting far more conservative leverage. Spread capture plus rolls results in a far higher revenue capture per trade than traditional B Book.
  3. One way commodity CFD instruments Metals (outside of gold), and Agriculturals, do not lend themselves to B booking and trade on high spreads, therefore, A book gives away too much of the potential economics.
  4. Crypto CFDs, and especially unleveraged crypto spot, particularly outside of BTC and ETH, is ideal for traditional market making spread capture and not B Booking.

PriceOn™ from TraderTools Inc. can customize an algorithmic solution to your flow, utilizing the same tools as a professional High Frequency shop, enabling your dealers the ability to take back control of the process. We have in-house quants and analysts, ready to help customize the PriceOn™ just for you.

To learn more, reach out to my sale team at sales@tradertools.com , or directly to me at drewn@tradertools.com – The team and I are happy to describe this in greater details and discuss your flow and market place opportunities.

  • Coinsmart. Europe’s Best Bitcoin and Crypto Exchange.Click Here
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  • Source: https://www.financemagnates.com/thought-leadership/how-tradertools-priceon-can-scale-up-and-improve-your-business/

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