GFI and Traiana offer processing boost for forex options trading

Foreign exchange options trading may get a boost with broker GFI and technology vendor Traiana both launching automated processing services in the market.

The introduction of these services highlights the growing importance of cost-effectively transacted options, said Derek Sammann, global head of FX options at Calyon in London. "As the market becomes increasingly commoditised and margins on vanilla options tighten, it is important that costs are cut," he added. GFI is offering clients straight-through processing for FX options by tying up its FX Blotter and Fenics FX tools.

Launched earlier this year, FX Blotter is a web-based tool that captures trade details from GFI. The data can be viewed and downloaded by GFI brokerage clients.

An upgraded version of the tool can now be tied up to GFI's pricing and risk management platform for FX options, Fenics FX. In doing so, banks can seamlessly export trade details from FX Blotter into Fenics for risk analysis, trade confirmation and accounting entries.

Meanwhile, Traiana is introducing options to Harmony, its hub that manages the give-up process between brokers, executing banks and ECNs. Harmony 3 will launch in October, and will automate give-ups on options contracts and offer tri-party credit analysis to enable banks to monitor their credit positions with clients.

Until now, hedge fund customers have typically matched the payments via fax or on an email after the transaction has taken place. Now, Traiana's Harmony software will enable hedge fund customers to feed the options transactions with the software automatically updating the banks' record.

Michael Laven, London-based executive vice-president of Traiana, said the new capability would enable banks to save time and money on executing options transactions. "It will cut out the possibility that trades are not valid because data is not keyed in correctly. It will cut costs because it will replace the manual process."

He said the new technology would provide an opportunity to increase the scale of options transactions banks carry out, and added that it would enable banks to consolidate their voice and OTC derivatives books. "Users will be able to put through all options give-ups from all prime customers on the system, making processing much easier and more efficient."