Invest in a variety of products to capitalize on volatile FX market

By: Punit Kaker

Over the last few years, the FX market has been very volatile due to various factors, including:

  1. Unconventional monetary policies from central banks
  2. Electoral uncertainty
  3. Increased geopolitical risks

To capitalize on this volatility and generate higher returns, private banks have been advising their clients to trade/invest in a variety of FX products. They also advise their clients to use FX products to hedge their foreign exchange risks. These products range from simple/vanilla options (e.g. spot – forwards swaps) to complex products (e.g. exotic options, accumulators/de-accumulators, and target return products).

Increased demand for vanilla and complex FX products and higher volumes have raised the profile (and profits) of FX advisory desks within private banks. Volatile FX markets, higher volumes, and increased profitability have contributed to significant demand for an FX margin trading solution that enables private banks to manage and grow their FX advisory business with proper risk controls and operational efficiency.

The ideal FX margin trading solution includes:

Profitability & competitiveness: The solution should be scalable and modular to enable volume growth and provide a comprehensive FX products suite to a larger client base

Risk control: It must provide real-time risk management, position keeping, and collateral management

Straight-through trade processing: The solution must have real-time straight-through trade processing combined with a comprehensive set of post-trade processing functionality to lower operational risk

Developed in collaboration with our international banking client base, MarginMan from SS&C is the industry standard solution for FX margin trading. MarginMan provides real-time risk management, position keeping, and trade processing for a comprehensive suite of vanilla and structured FX products.

For more information on how SS&C can help you manage your margin trading business, visit our website or email solution@sscinc.com.