Commodities boost volumes on BarCap’s forex platform

Barclays Capital has enjoyed increased foreign exchange volumes on its white-labelled e-trading platform as a result of adding commodities earlier this year, a senior official told Risk’s sister publication FX Week .

"Commodities are a popular asset class," said Vince O’Sullivan, director of UK and European foreign exchange sales at Barclays Capital in London. "Adding them... has enabled us to extend our online trading capabilities to a wider client base. Due to the flexibility of the system, commodity clients can access the foreign exchange platform and become comfortable trading both asset classes."

BarCap launched online commodities trading on September 15 with live spot streaming prices in four precious metals (gold, silver, platinum and palladium) and three-month contracts for eight London Metal Exchange-based metals. The bank has gained more than 40 clients since then and expects 100 more to go live in the first quarter, said O’Sullivan.

The commodities/foreign exchange mix has been particularly attractive to broker/dealers and BarCap’s product is also gaining more traction with the hedge fund community, said O’Sullivan.

"A lot of them are using both foreign exchange and commodities even if they are just using one part for reference purposes," he said. Some clients may want to use the live streaming pricing as an information tool, he added.

Large corporate clients who trade both products have also shown interest in the last few months, said O’Sullivan. BarCap now offers foreign exchange, money markets and commodities on one platform. Money markets was first to launch in January and covers 11 currencies.

BarCap added forex options pricing to its white-label platform in September this year and expects to offer online execution in foreign exchange options early next year. It has three white-label products - for client banks wishing both to pass on price-making to Barclays, those wishing to keep it in their own hands, and for corporates using it to deal with their internal branches.