Technology Buoys Retail Currency Trading, Reshapes Old Models
By Eva Szalay Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--Retail foreign-exchange trading is emerging as one of the biggest growth areas in the currencies space, and some of the trading firms that facilitate these flows are building up a whole new business model.
Traditionally, the model was simple: big banks feed currency rates to so-called retail aggregators, and those aggregators slap a margin on top before churning them out to clients with basic trading tools.
Now, though, some retail firms are making their own prices, using very similar techniques to traders at heavy-hitting banks, including computer-driven algorithmic trading that was considered cutting-edge in the wholesale market just a couple of years ago.