Flow Traders is a global independent ETP liquidity provider. Founded in 2004 in Amsterdam, Flow Traders today has trading operations in Europe, Asia-Pacific and the US. With a team of around 220 professionals, including over 60 traders and 10 sales traders, Flow Traders provides continuous liquidity for ETPs through its membership of more than 90 global stock exchanges and trading venues worldwide.
Flow Traders continuously provides liquidity to all major global markets, quoting competitive bid-ask prices on multiple exchanges to institutional counterparties upon request.
“We’ll continue this year to push out our low-touch and high-touch automated quoting capabilities and make sure we can trade any request that crosses our desk as effectively and as tight as possible. We want all our counterparts to trade with us at the most transparent and best possible prices at any given time,” states Christopher Meyers (pcitured), Head UK & NED Institutional Trading at Flow Traders.
Last year, one of the biggest internal developments at Flow Traders was that it further grew the number of institutional traders. From a market perspective, the biggest development, says Meyers, was the rise in Request for Quote (RFQ) tools; e.g. Tradeweb, RFQ-hub and Bloomberg’s RFQE.
This allows buy-side institutions to find their way directly into liquidity providers like Flow Traders and at the same time allows them to be compliant with applicable regulations.
“Asset managers are taking ETF trading out of their cash equity pools, and becoming more aware that they can achieve best results by integrating an RFQ tool that allows them quick and easy audit when needed. Another catalyst for growth is MiFID II regulation, due to take effect from 3 January 2017. More counterparties are looking at RFQ tools to get better prepared when it comes to improving their execution, reducing costs and implementing an order trail audit. We are very well-positioned to trade with institutional counterparties in this constellation.” says Meyers.
Awareness of trading off-exchange with liquidity providers is certainly growing among investors. Part of this is down to a younger generation of buy-side traders, who are keen to use new and efficient tools to fire off requests and getting the sharpest prices back.
“As the market gets more technical, institutional investors need to up their games.” says Meyers. “Using a traditional broker/dealer, is putting someone in the middle who doesn’t necessarily need to be there as via an RFQ tool or chat you can trade with us directly.”
Currently, more than 350 buy-side institutions trade with Flow Traders. Using the RFQ tool, an institutional trader indicates that they want to buy, for example, EUR5mn of a particular ETF. That quote request is then made visible to Flow Traders, who quote bid-ask prices which the institutional trader can accept or decline.
“There are two ways this can happen; either manually (high-touch) or automatically (low-touch). The institutional trader gets a streaming price back while the RFQ tool ranks the quotes. If they decide to buy then the trade is executed. It’s a straightforward set-up,” says Meyers, who, on winning the award, comments: “We are of course very happy to receive industry recognition through winning this award. We remain keenly focused on staying ahead of the competition and for us, winning this award tops off what has been an excellent 12 months. We appreciate the vote of confidence from etfexpress’s readership.”