Trading is about getting your orders filled, competitively and quickly. The speed of execution to clear your order is mission critical. A millisecond of latency can make the difference between a preferred and non-preferred price fill. Even if that is a fraction of a difference, imagine that multiplied over a million trades throughout your trading career?
At FxEthos, we understand the speed of execution. If your trades don’t clear fast and affordably, we don’t stand a second chance of getting your business. We have invested millions in getting the technology right. We didn’t improvise on existing standards. We have reinvented the wheel.
Traditionally, brokerage houses clear your orders sequentially via external liquidity providers. You have the best bid/ask prices based on “last look” value, prioritized by the brokerage house in preference of their performance, relationship, cost of trading, kickbacks, etc.
Your order clears sequentially at the various liquidity providers . Of course, thanks to high speed communication grids and extremely powerful servers, this happens in a fraction of a second. Once the order is “accepted”, the order is filled and you get a confirmation on your screen.
When none of the providers are able to fill your order at your preferred price, the order clearance engine, after trying all the providers sequentially, replies with a no-fill status to your broker who then passes the message onto you. This prompts a requote message on your screen, asking if you would like to fill at the next available price.
Althoughwe have simplified the entireflow to help you understand the process, the general core model is still the same.
FxEthos has developed its order clearance engine differently, both conceptually and technologically.
FxEthos implements an open-aggregation of orderbooks and price control factors from various liquidity providers, institutions, funds, and traders just like you. Based on specific conditions, flexible and powerful complex event processing (CEP) capabilities, and broad market connectivity, these order flows and “books” are maintained on a per millisecond basis.
Often, data swaps occur within sub milliseconds, which is the degree of robustness and scalability developed in the order clearance engine.
When the fill for your order is requested, an immediate match is doneand filled.
This may be a partial fill(if your order is smaller than the available order match) or a clustered fill(if your order is larger than most matched orders; groups of smaller orders are clustered together to match your order size). All these conditional fills and offsets are handled by the clearance engine. Oh, and all of these fills happens in milliseconds.
Naturally, you can understand the superiority and dexterity of such a clearance engine. Such an algorithm of clearing orders also greatly eliminates re-quotation of your orders. Why? As these orders are filled in parallel, there is always more than one match for your order. We won’t say that there are no requotes(although we are striving towards that),but the chances of having a requote in our clearance model is very, very low.FxEthos Business Model.
We are more of a liquidity aggregator than a clearance provider. The more liquidity we can deploy by working with more orders cleared through us(through other liquidity providers or traders’ orders), the more orders we can clear.Our primary service is to clear the clients’ orders competitively and efficiently. We have no interest in trading against clients’ orders or manipulating market conditions to profit from losing client trades.
Benefits of Trading with the FxEthos Clearance Technology
If you are an institution or liquidity provider who wants to have access to our clearance or liquidity provision, please contact us.