FlexTrade's Kedia on the DGCX Relationship (Q & A)

Algorithmic trading systems provider FlexTrade was recently approved as an independent software vendor (ISV) with the Dubai Gold and Commodities Exchange (DGCX), an electronic commodity and currency derivatives exchange.

Sell-Side Technology spoke with Manish Kedia, managing director of the company's Singapore office, which engineered the DGCX deal.

SST: How did the relationship with DGCX come about?

Manish Kedia: Very simply, client demand. Several of our clients were interested in options market making on the newly launched USD/INR Options platform on DGCX.

SST: Why do you think the exchange chose FlexTrade as an ISV?

Kedia: The DGCX is very stringent in their selection process and only provides the very best in derivatives trading technology for its members. Besides our long history in the field, the customization aspect of our algos and trading strategies was a major attraction as was our risk management functionality.

SST: In what technology areas is FlexTrade at the forefront?

Kedia: FlexTrade is a multi-asset solutions provider. We've always been at the forefront on the equities side, and also lead the charge in FX, options and futures, as well as analytic technology solutions.

SST: What current demands are your clients under, and how is your company responding?

Kedia: The clients are looking for cross-market, cross-asset strategies. They need access to additional exchanges, additional liquidity on the OTC markets, connectivity between various markets, and a high performance system that is flexible and robust enough to execute their trading algorithms.

We are responding by offering off-the-shelf cross-exchange, cross-asset strategies and the flexibility to allow the clients to modify these algos and write new ones. We are also increasing our market access─as the DGCX empanelment clearly indicates─as well as streaming spot FX and NDF prices from banks. We have also increased our hosting presence in Chicago, New York, London, Frankfurt, Singapore and Hong Kong to allow client proximity access to various exchanges and liquidity sources, as well as enabling broker dealers to provide market access and OTC liquidity using our platform.

SST: What are FlexTrade's latest offerings?

Kedia: For options trading, we recently rolled out two new platforms, which are covered in the DGCX release and available to their members─FlexOPT-RM, which is a real-time risk and stress analysis platform, and Flex-OPT-MM, which is an order-driven market making platform for advanced options traders. In addition, we also offer a new analytic platform called FlexEdge, which gives traders advanced forecasting capabilities for handling US equities, and FlexSpread, a unique cross currency program for pairs trading and risk arbitrage for equities markets around the globe.

SST: What industry trends do you see developing in 2012?

Kedia: Overall clients are looking for more sophisticated analytical and risk management tools. On a regional basis, clients want to have more of a global presence. For instance, clients that have been successful with their strategies in a certain region or a certain asset class are interested in expanding their success and experience to more markets globally. This expansion could be towards more mature markets like the CME or less liquid markets where they can run their market making algorithms with better risk management and flexibility.