FX options e-trading platform Digital Vega and CME Group have launched a new FX options block trading service.
The new offering will allow buy-side participants to use existing OTC workflows on Digital Vega’s multi-bank platform Medusa to request quotes and trade blocks of FX options on futures.
“Enabling customers to negotiate and trade risk-transfer blocks via Digital Vega’s Medusa platform is an exciting development in the electronification of the FX options market,” said Chris Povey, executive director and head of FX options at CME Group.
“This partnership lowers the barriers to entry for buy-side clients looking to gain the margin and operational benefits of our centrally cleared FX options by allowing them to use existing OTC workflows and lean on OTC relationships. In addition, clients could gain access to new liquidity given there is no requirement for bilateral credit relationships.”
Digital Vega’s connectivity, GUI and workflow technology will be leveraged by users to request prices in CME Group’s centrally cleared FX options from multiple liquidity providers in competition.
These options can be more margin efficient versus traditional OTC options for those subject to uncleared margin rules, claimed the two firms in a statement.
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“Our new service provides liquidity access for more clients and market makers to trade with each other without having to establish new bilateral credit agreements, which we expect will result in increased liquidity for the market as a whole,” said Mark Suter, executive chairman and co-founder at Digital Vega.
“We are encouraging clients to onboard to this service now so that they can fully test the system before they begin trading.”