How to game a Sef: Banks fear arrival of arbitrageurs
Some banks are scared to make prices on platforms that offer both an order book and request-for-quote trading – other users might be able to game them by using the two approaches in conjunction, the banks claim. The result could be that dealers stop being 24-7 liquidity providers. Tom Osborn reports
It’s a tactic beloved of hagglers the world over – claiming an item can be bought more cheaply elsewhere – but imagine how much more powerful and convincing it would be if the prospective buyer secretly had the power to write some of those other price tags, effectively setting market value before opening negotiations.
Some dealers claim they are facing this risk when making markets on swap
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Markets
Will Kalshi and Polymarket win over prop shops? Don’t bet on it.
A few market-makers – Jump Trading and Susquehanna among them – are dabbling in prediction markets but most are holding off due to patchy liquidity and legal uncertainty
Euronext, LCH back Esma as exchange super-regulator
National oversight hurts Europe, exchange officials say – but some are not ready to accept a single watchdog
FactSet’s Portware expands to tackle complex FX
EMS vendor eyes automation for high-touch FX trades while adding connectivity to new venues
Treasury basis trade loses its allure as returns shrink
Tight spreads and rising funding costs are pushing the cash-futures basis trade out of favour
How vol eruption blew up Goldman’s rates book
Dealers were short payer skew from corporate and hedge fund flows. Then came the Iran war.
XTX Markets’ US sales head joins rival IMC Trading
Benjamin Klixball takes up new role at Dutch prop trader in New York
Hong Kong biotech: from niche exposure to broader product ecosystem
Hong Kong’s biotech market is maturing from a niche thematic allocation into a broader capital markets proposition
Liquidity on Kalshi, Polymarket ‘too thin’ for institutional use
Patchy trade flows cause outsize market impact for financial events, research from Risk.net shows
