Trading the Right Chart™
TRC is a multi-currency quotation and trading solution for exchanges where the FX conversion is shifted to the point when the trade is executed for a financial instrument. With the solution deployed at the exchange level rather than at the broker level, one can trade with more certainty and confidence, with greater transparency for cross-border trades. The technology relies on M-DAQ’s FX engine which provides low latency, high frequency trades to power the multi-currency solution.
Electronic stock exchanges stand to create more trading volume and revenue by having a global accessibility to financial instruments. However, all exchanges still offer their pricing and statistics in the settlement currency of the financial instrument. This brings about a FX conversion risk to the end investors and acts as a barrier against cross-border trading growth.
M-DAQ’s patented technology hopes to remove this barrier by providing tradable prices converted to the end investors’ preferred currency by partnering with the exchange. With our TRC solution the exchange has the benefit of publishing and controlling market data to different regions of the world based on the local currency of the investor. Traders can then trade using this available information in their currency of choice.
Be it a Buy side investment firm or a Sell side retail firm, being cross-border would benefit the firm’s customer base and help increase it. In this context, allowing highly liquid stock prices to be viewed in the trader’s local currency would lead to better and faster investment decisions with reduced risks. M-DAQ TRC aims to provide the solution for this with our patented technology whereby brokers will have access to firm executable prices in their choice currency, eliminating the FX conversion risk.
IMPACT OF FX ON SECURITIES PRICES
Currency movement has significant impact on investment returns when buying and selling foreign securities. Presently, FX rates are unknown at the point of trade execution, and fluctuation in FX prices can greatly reduce or erode investment returns.
The sample graph illustrates pre and post M-DAQ scenarios where buying and selling signals (i.e. “buy low” and “sell high” points) are vastly different when analysed in the respective investment currency. Although this graph uses a one-year time period, the same is observed for all other time intervals including intra-day for all currencies.
This example clearly demonstrates that exchange rates volatility increases uncertainty and complexity for an investor making cross-border securities trades. The analysis of the same securities over the same time period looks very different with currency overlay on top of it.
By shifting FX conversion to the point when the trade is executed and performing it at the Exchange level rather than at the broker level, we believe you can trade with more certainty and confidence and receive better fills for your cross-border trades.
CREATE NEW FX REVENUE STREAM
With fees racing to zero, M-DAQ provides an advantage for Exchanges to attract more overseas companies for secondary listings, increasing business transactions with financial intermediaries.
BENEFITS FOR EXCHANGES
A holistic and fully tested solution that enables Securities Exchanges to go multi-currency without significant changes to systems and back-end processes, with low start-up and running costs.
One Liquidity Pool
Be a unique differentiator in the global Exchange Operator space with our patented technology offering “multiple virtual currencies order book” overlay on “the one and only native securities liquidity pool”.
Increase Cross-Border Trading
Increased trade velocity by bringing FX conversion to pre trade rather than post trade which will encourage more cross-border trading.
Attract Secondary Listings
Attract secondary listings from overseas companies who want to broaden their company listing in different time zones in a myriad of the world’s local currencies.
BENEFITS FOR BROKERS
Promote FX on an effective “Best Execution” basis (via access to interbank pricing of top 10 global liquidity providers) at a point in time when clients, both institutional and retail, are focusing on overall costs of execution.
Levels the playing field with global brokerage houses and allows better competition for offshore institutional flows, in particular hedge fund and risk arbitrage activity.
Increase Market Share
With stock prices quoted in different currencies, more participation can be expected from foreign investors resulting in a sustainable increase in brokerage fees revenue.
BENEFITS FOR INVESTORS
Improved Global Access
Investors enjoy previously inaccessible wholesale FX prices from interbank pricing of top 10 global liquidity providers.
Remove Uncertainty of
Live streaming executable securities prices in your preferred currency, allows investors to better able to “seize market opportunities” with no need to “price in” additional post trade FX costs.
Trade in One Preferred Currency
M-DAQ facilitates inbound and outbound flows using the preferred currency of choice; for e.g. Australian investors can trade off-shore securities in AUD whilst enabling off-shore investors to trade Australian securities in foreign currencies.