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HSBC offers algorithmic execution strategies to intelligently manage FX transactions with full cost analysis. Their strategies are designed to access liquidity across venues to reduce market impact for clients. As a major FX market maker, HSBC can provide sophisticated quantitative models combined with their significant balance sheet and liquidity access. Their algorithms help clients meet transparency requirements while reducing trading time.
HSBC offers algorithmic execution strategies to intelligently manage FX transactions with full cost analysis. Their strategies are designed to access liquidity across venues to reduce market impact for clients. As a major FX market maker, HSBC can provide sophisticated quantitative models combined with their significant balance sheet and liquidity access. Their algorithms help clients meet transparency requirements while reducing trading time.
HSBC offers algorithmic execution strategies to intelligently manage FX transactions with full cost analysis. Their strategies are designed to access liquidity across venues to reduce market impact for clients. As a major FX market maker, HSBC can provide sophisticated quantitative models combined with their significant balance sheet and liquidity access. Their algorithms help clients meet transparency requirements while reducing trading time.
Designed for clients that wish to reduce the impact of a transaction even further, this passive algo will match order flow across a range of venues and execute Why partner with HSBC for FX algos?
Towards smarter execution
proportionally to reduce market footprint. The algo learns how the market fills its In addition to the range of specific solutions HSBC can offer, there are child orders and adjusts the underlying fill probability model in real time. Clients major benefits to partnering with an institution with such a strong balance that use this strategy could benefit from HSBCs significant access to liquidity, sheet and deep expertise across both G10 and emerging markets. which will provide them with the ability to explore a range of venues and other Algorithmic execution strategies could satisfy increasing demand for intelligent trading solutions with full transaction cost analysis liquidity pools without the typical costs of gaining access. Often referred to as a Balance sheet and liquidity access capabilities, says HSBC. The right provider should be able to deliver access to liquidity and client-driven solutions that span the foreign floating iceberg, this strategy is suitable for large transactions in more illiquid For an algorithm to operate well, it should be based on an advanced and exchange markets currencies and, again, clients could benefit from HSBCs ability to offer all major sophisticated quantitative-based model, but access to liquidity is also key. currencies including G10 and emerging market pairs. Not only does HSBC have that sophistication, we also have better access to liquidity throughout the FX markets, thanks to the size of our balance Key points Implementation shortfall strategy sheet, says Olivier Werenne, head of eRisk liquidity management, EMEA at New regulations have led to a growing Classified at present as an aggressive strategy in the HSBC product suite, this HSBC. Our own internal liquidity is also significant. This means that, when demand for risk management solutions that algo strikes a balance between market risk and market impact. It aims to execute clients are trading with us, they have confidence that we can execute any can enhance transparency. an order by minimising slippage from market price at the order start time. It and all of their orders when conditions allow. Algorithmic execution solutions (algos), such optimises the number of child orders to place in the market, their size, venue as those offered by HSBC, can assist users with and the time between them. The algorithm also balances the opportunity cost Transparency requirements and time saving their pre- and post-trade analysis requirements. between placing passive orders and crossing the spread by using proprietary fill The HSBC FX algorithms also allow trading desks to reduce execution HSBC has designed a range of algos to provide probability and market impact models, as well as real-time machine learning- time, leading to greater transparency and improved risk management risk management solutions for its clients that based prediction analytics. HSBC is able to offer clients control over execution capabilities. As Mathijs Peeters, director, FX & commodities institutional are based on advanced and sophisticated pace, adjusting the strategy based on their sensitivity to volatility risk. sales at HSBC, points out, before algos were available, trading desks quantitative-based models. would spend a significant amount of time executing trades. Now, he As a key FX market-maker, HSBC also offers What does the future hold for HSBCs algo FX product suite? explains, our clients have realised that, as the regulatory environment clients access to liquidity throughout most FX Applying new thinking to investor solutions is an integral part of HSBCs has changed particularly in relation to price transparency our algo markets, across a suite of G10 and emerging initiative to build the dealing room of tomorrow1. This aims to anticipate and strategies can be used to kill two birds with one stone by addressing their Alexander Barzykin, Mathijs Peeters, Director, FX & Olivier Werenne, Head of eRisk market currency pairs. address the challenges that clients may face as a result of fast-moving regulatory transparency needs and saving an enormous amount of execution time. FX eRisk Director Commodities Institutional Sales Liquidity Management EMEA and technological change, as well as long-term shifts in market conditions. As such, HSBC has enriched its range of FX algo solutions to meet ever-changing Reliable quantitative execution models Recent advances in technology, as well as scrutiny How can algos help with transparency needs Time-weighted average price (TWAP) strategy market conditions and client requirements. Innovative algos will be released in HSBC invests in quantitative research, co-operates with academia and of the market and of new regulations, have led in the current regulatory environment? Liquidity-seeking strategy the coming months: integrates modern knowledge of market dynamics, optimal execution and HSBC to develop a robust range of algorithmic HSBCs algo strategies provide access to full Implementation shortfall strategy artificial intelligence into its algorithms, says Alexander Barzykin, FX eRisk strategies to support investors as they navigate transparency upon execution. Users receive details The Gamma Hedger strategy will support option desks in developing gamma- director at HSBC. By design, the software architecture allows HSBC to the volatile global FX markets. By leveraging the of every transaction executed as part of their overall TWAP strategy neutral positions. quickly introduce innovations. All algorithms and models are verified by breadth of HSBCs liquidity network, emerging trade time-stamped and ready to be incorporated This FX algo is designed to trade at an even pace over The Contingent Order strategy will allow clients to implement trades based on an independent team and thoroughly tested post-implementation. Our markets franchise and FX expertise, these strategies into the organisations own analysis for risk a specified time period, adapting to the prevailing signals from economic data. aim is to provide HSBC clients with reliable and efficient tools to suit their could help investors to make their FX execution management purposes. This provides a full record of market conditions and choosing the best venue of Volume-weighted average price and per cent of volume algorithms based on execution needs, aid decision-making with pre-trade analytics and ensure more efficient. evidence for the board, investors, regulators and any execution for trades. HSBC has developed a third- HSBCs proprietary assessment of market liquidity and trading volume. transparency with our TCA. other relevant stakeholders to review. generation version of this solution. First-generation Why should investors consider algorithmic By using algos, clients can also access pre-trade algorithms operate under statically predefined schema; The Liquidity Plus strategy will provide a gateway to access all HSBC algorithms. For professional clients and eligible counterparties only. execution in markets such as FX? analysis for optimum execution of their trading second-generation algorithms introduce some Clients will be able to configure the strategy to use different algorithms under New financial regulations have led to increased strategies. In the current market and regulatory optionality in how the execution progresses for different market conditions and modify the parameters of the order, as well as demand for risk management solutions that can environment, analysis should be much more example, by randomising quantity and time between the execution algorithm itself, to explore different trading opportunities. HSBCs support greater transparency. HSBC has developed statistically driven and quantitatively based. HSBCs child orders but the rules are still statically configured transaction cost analysis (TCA) capabilities will show which algo is operating for Contact its algorithmic execution range to cater to this algo strategies can provide this pre-trade insight. and heuristic. The HSBC TWAP third-generation algo each individual child fill. Beyond these innovations, HSBC also offers bespoke need, particularly in relation to best execution. uses a probabilistic assessment of market activity in execution facilities to provide clients with access to a variety of solutions that will For more information on HSBCs FX Algorithmic solutions, Under Europes Markets in Financial Instruments How can HSBCs algorithmic execution real time that is based on the banks in-depth market fit even the most unique requirements. please email: markets.insights@hsbc.com Directive II, for example, organisations must be able strategies be used in the FX markets? expertise. As a result, clients can decrease the market Please note that the use of algorithms does not guarantee performance of the execution to explain venue choice, timing, trading costs and The following solutions, available from HSBC, have impact of their activity by slicing the order while and, depending on market moves during the execution of the order, it may result in a www.gbm.hsbc.com/solutions/markets/fx-algos disadvantageous outcome. prices to regulators, as well as stakeholders such as been developed to support a wide variety of risk leaving no obvious footprint, and execute child orders senior management and shareholders. management requirements and cost expectations: while taking into account the market microstructure. 1 gbm.hsbc.com/dealing-room-of-tomorrow