TORA, provider of the industry’s most advanced front-to-back cloud-based order and execution management system (OEMS), has today announced the release of their new FX auto-hedging function for equity pairs trading.
The new solution sits within TORA’s market-leading equity pairs trading algo suite and delivers advanced operational trading efficiencies. The FX function offers automatic hedging for clients’ cross currency equity pairs and equity derivatives trading. This development will be welcomed by many risk arb desks where managing FX exposure is essential to performance.
Traditionally, risk arb traders have managed multi-currency spread orders using specialized algos in one system, and another separate system to manage their corresponding FX risk. Using several different applications and/or spreadsheets can be incredibly time consuming for the trader to calculate, maintain and update several times throughout the trading day. It can also result in imperfect FX hedging and, in certain scenarios, poses operational risk of significant mis-hedging.
Robert Dykes, CEO, TORA said “We are really excited about our new equity pairs FX auto-hedging capabilities. The new functionality will enable superior operational efficiency by helping risk arb traders to easily currency hedge their pairs trading in one completely automated system.”
Ovidiu Campean, Global Head of Product at TORA said “We made the new solution incredibly easy to use. All the trader needs to do is select the FX base currency and counterparty from an intuitive dashboard. As the equity orders begin to fill, the algo calculates the live FX exposure and creates orders to maintain the FX hedge. An added benefit of the solution is that the trader is not tied to executing the FX hedging orders with the same broker as the equity orders.”
The system captures all transactional information on the pairs orders within the TORA OEMS and gives the trading desk a single holistic view of all activity in one place. The multi-region pairs algo suite is available natively in the TORA multi-asset OEMS used by many global buy and sell-side investment firms. TORA clients can manage the risk on pairs orders with unrivalled levels of granularity and control, in a variety of ways, aggression levels and execution styles.
TORA’s cloud-based OEMS was one of the first to launch 13 years ago, and delivers advanced functions for portfolio rebalancing, pre-trade and post-trade TCA to improve execution quality combined with strong post-trade allocations and commission management tools. The OEMS is multi-asset, multi-region, compliant with MIFID II, provides detailed reports and analytics.