FCM360 Articles

WHY IS THE FINANCIAL CLOUD SO CONFUSING? Cloud computing is one of the most mysterious enterprise technologies introduced in the past decade. It can mean many things to many people and rarely has a unified description. The term “Financial Cloud” which is becoming increasingly used by large financial institutions such as exchanges and banks  has equally  proven to be a mystery. Several large financial exchanges and financial services companies have recently launched their Financial Cloud offerings in hopes of capitalizing on this growing industry. When digging into the primary purpose of these newly launched cloud products, you will find that they are geared towards providing proprietary services to the company's clients and are not suitable for more than a limited range of purpose. The other issue that that the financial cloud providers admit that their cloud solutions are aimed at middle and back office functions that cannot replace bare metal machines that host high frequency trading applications, algorithmic trading or low latency market data and news feeds. This is very confusing to end users and organizations looking to incorporate third party cloud services into their existing trading infrastructure. Most users of these services cannot exactly explain what these financial cloud Read the Entire Article...

The following list of FCM Brokers is reported by the CFTC and is the official source for all data contained on this page. [table id=1 /] Description of Report Data Fields The summary table shows the following columns of information:Reg As: FCM: Futures Commission Merchant that is registered with the Commodity Futures Trading Commission;BD: The FCM is also registered with the Securities and Exchange Commission as a securities broker or dealer;RFED: Retail Foreign Exchange Dealer that is registered with the Commodity Futures Trading Commission;FCMRFD: The FCM is also registered with the Commodity Futures Trading Commission as a Retail Foreign Exchange Dealer.DSRO:This column identifies the firm's Designated Self-Regulatory Organization (DSRO). A DSRO is the organization that is primarily responsible for conducting audits of and ongoing financial surveillance over the firm. A DSRO can be a designated contract market (DCM) or the National Futures Association.A/O Date:This is the 'as of' date of the financial report from which the summary financial data is taken.Adjusted Net Capital: This is the amount of regulatory capital available to meet the FCM's minimum net capital requirement. The classification of assets and liabilities used in arriving at net capital, and the additional capital haircuts that a FCM may Read the Entire Article...

CFTC and Dodd Frank regulations making it hard for traders to profit from markets - increasing regulation affecting cleared derivative and OTC FX markets The Commodity Futures Trading Commission (CFTC) is pulling rules our of the closet that seek to protect market participants. Time and time again since its enactment back in 1936, the CFTC has come up with rules and regulations that are aimed to curb uncertainty in the commodities markets that arise as a result of speculative buying and selling of commodity based swaps. The latest sets of rules are aimed at controlling various activities in the market as explained below. This is hitting the OTC FX markets the hardest. While many exchange and liquidity pools had forced energy traders to comply with a million requirement to start trading OTC contracts in Power, Nat Gas and Petroleum products in the past, it has not been until recently that the OTC FX market has been forced into such requirements. As a matter of fact, many prime brokers and FCMs officially kicked out OTC FX traders that had active and good-standing  accounts on October 1, 2012. This ousting of many successful FX traders has left a liquidity void in Read the Entire Article...

HOW TO BEAT THE MARKET DURING NEWS TRADES: THE ULTRA-LOW LATENCY READABLE MACHINE NEWS FEEDS Any trader who has tried to trade high-impact new events such as the SU Non-Farm Payrolls Report will know that beating the market at such times is no mean feat. High-impact news events are news items that have an immediate and sustained impact on the price action of affected currencies. At those times, the market experiences increased volatility, which generally follows the pattern described below. In any market news event such as those listed on the forex economic calendar, there are four numbers (figures) to be reckoned with: Pre-release consensus numbers (the expected figures) The previous numbers Actual numbers which are not known to traders until they are released into the markets Revisions to the previous number. Prior to a news trade, only the first two numbers are known to traders. For a news trade to be worth trading, the actual number has to have a reasonable amount of deviation from the consensus number. Generally speaking, the difference between the consensus number and the previous number is taken as a benchmark for an appropriate deviation. If there is an appropriate level of deviation, the market Read the Entire Article...

High Frequency Trading (HFT) consists of the predictive buying and selling of contracts using algorithmic trading software and ultra low latency trading infrastructure where fractional increments of money can be earned in sometimes microseconds( millionth of a second).  The trading technique as such as been used in various forms as markets evolved and equity trading matured. With the ascendency of new algorithmic trading firms with their cutting-edge, technology-driven trading strategies with the goal of earning profits in billions of dollars, HFT has become the wonder-strategy for low-investment, high-profit trading opportunities.  Today, nearly seventy-three percent of US equity markets> transactions run on HFT ensuring high-liquidity and price-visibility. HFT and newer opportunities for High Frequency Trading in the Forex market In fact, it has been quite a mixed bag for HFT in the U.S. Non-technology traders are disconcerted with unfair advantage gained by new-age-automated trading firms. Besides, they are also affected by the drastic fall in profit earning due to the thin spread of revenues HFT generates. First a look at High Frequency Trading High Frequency Trading, is a typical trading strategy, where sophisticated algorithms running on advanced servers identify trends in national and international market places, analyze them and place ‘flash Read the Entire Article...

As foreign exchange trading continues its rapid growth, new technology has enabled Forex traders to borrow and adapt techniques of high frequency trading, also known as automated trading and algorithmic trading, from the equities markets that spawned them. Foreign exchange trading, depending on which statistics you believe, is producing average dollar volume of around trillion per day and estimates are that high frequency trading accounts for 30 to 50% of this volume. Algorithmic trading or automated trading, offers some distinctive advantages for traders who prefer to conduct trading activities with multiple brokers to octane the best liquidity, lowest spreads and fastest order execution. There are additional benefits to trading with multiple brokers, using more than one data source, trading platform or currency pair. With high frequency trading, having more than one broker enables you to detect if a broker is front running, which is, jumping in just ahead of you in order to negatively affect your fill price. Multiple price data streams permit the trader to compare the prices of a particular currency pair and trade with the most advantageous source. Using more than one trading platform permits the user to customize automated trading scripts and expert advisors to Read the Entire Article...

Low latency news feeds provide key economic data to sophisticated market participants for whom speed is a top priority. While the rest of the world receives economic news through aggregated news feeds, bureau services or mass media such as news web sites, radio or television low latency news traders count on lightning fast delivery of key economic releases. Trading The News – A Brief Overview Experienced traders recognize the effects of global changes on foreign exchange (Forex/FX) markets, stock markets and futures markets. Factors such as interest rate decisions, inflation, retail sales, unemployment, industrial productions, consumer confidence surveys, business sentiment surveys, trade balance and manufacturing surveys affect currency movement. While traders could monitor this information manually using traditional news sources, profiting from automated or algorithmic trading utilizing low latency news feeds is an often more predictable and effective trading method that can increase profitability while reducing risk. The faster a trader can receive economic news, analyze the data, make decisions, apply risk management models and execute trades, the more profitable they can become. Automated traders are generally more successful than manual traders because the automation will use a tested rules-based trading strategy that employs money management and risk management techniques. Read the Entire Article...