Currenex, HotspotFXi, Integral, FXAll and LavaFX are institutional trading venues. Each with their
own limit order book. Their prices will correlate most of the time and randomly will throw off arbitrage
opportunities between them. (See Rockshore Partners for latency arbitrage, triangular arbitrage and
market making solutions.)
There are three networks that we have purposefully not mentioned here and those are EBS and Reuters
and Bloomberg. With EURUSD, EBS captures 60% of bank transactional volume each day. That's
significant two in aspects. When looking to possibly aggregate data from EBS into our distribution, we
knew that it would provide fair volume interpretation as we have done already. But economically we
would not be able to provide the same price structure for our subscribers.
*** Our plans do include integration of EBS as an add-on product.
It's a well known fact that EBS, Reuters and Bloomberg are the large networks. And if you don't
already trade on them you're looking to in the future. With EBS specifically - we know 25% of global
volume is traded daily there and that the rest of the networks: Currenex, HotspotFXi etc. trade around
these prices. This itself is critical information when you relate it to the objective of the market makers.
At this point, by not including EBS we have in theory included its actions and provided a clear picture
of actual trade flow within it. How? A rather simple price discovery mechanism by use of sentiment
is what's warranted here. The smaller networks trade around the actions on EBS, a clear statement of
fact and crucial to effective price discovery. After the smart money sells on EBS they also provide
liquidity into the smaller networks with bids, capturing the difference and the masses selling to follow
suit thus creating a passive yet rather quick arbitrage opportunity. Remember that the market makers purpose
is to provide liquidity and they do this not only to their customers but to networks as well.
