To rest or aggress? Trends in FX options Clob trading

Buy side’s execution style is evolving towards passive resting orders, finds CME Group’s Chris Povey

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Foreign exchange options trading remains primarily a request-for-quote (RFQ) market in which liquidity providers (LPs) show customers a risk-transfer, two-way price and the customer generally has little choice but to cross some bid/offer spread.

But trading FX options on central limit order books (Clobs) has emerged as an alternative execution method, enabling traders to leave resting passive orders in a centralised liquidity pool.

Studying the trading dynamics of some of the 12,000 users

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