Risk.net: Why NDF Execution Algos Might Still Hit the Spot

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With any new product, there is always a concern that it won’t live up to the hype. Google Glass did not revolutionise computing, the Sinclair C5 did not mark a step change in the field of transport and blockchain has yet to provide any tangible solutions for the world of finance. 

Many in the currency markets believe execution algorithms for non-deliverable forwards have similarly failed to meet expectations. During the pandemic, algo execution became the predominant method by which buy-side firms traded G10 spot foreign exchange. This led to significant demand for dealers to develop similar products for restricted currencies.

Brian Andreyko, chief product officer at Edgewater Markets, says: “You need a diverse set of trading partners on the other side of the algo that have a genuine interest in the liquidity and a depth of book to really accommodate the size of transactions or frequency of transactions that algorithmic trading can bring.”

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