Hedge Funds Drive Forex Trading Growth In 2007

Jun 19 2008 | 2:00am ET

Dramatic growth in trading volumes and a seemingly bottomless well of liquidity are transforming global foreign exchange markets.

According to Greenwich Associates, worldwide foreign exchange trading volume surged 36% from 2006 to 2007, continuing a steady run of double-digit annual growth. Banks and hedge fund managers are increasing their presence in FX as they diversify portfolios with international assets, and the market continues to attract new users, ranging from hyperactive hedge fund traders to a growing cohort of retail investors.

Much of this new business is being facilitated by electronic trading technology, which provides institutional, corporate and retail players alike with instant access to deep pools of liquidity at very low cost.

Globally, hedge funds were the biggest driver of growth in FX trading volumes last year. The amount of forex trading volume generated by hedge funds increased some 180% from 2006 to 2007. While hedge funds accounted for just 11% of global volume in 2006, their share jumped to nearly 20% in 2007.
 
The spread and advancement of algorithmic trading strategies is giving an important boost to hedge fund trading volumes.

“On a global level, hedge funds are, by far, the leading users of algorithmic trading strategies,” said Greenwich consultant Frank Feenstra.


In Depth

Hedge Funds Take Interest In ‘Soft Deposits’

Nov 19 2014 | 11:56am ET

New York-based Winchester Equities, headed by Avi Benamu and Jack Hazan, funds soft...

Lifestyle

Cohen Buys $101 Million Sculpture

Nov 12 2014 | 9:17am ET

Steven Cohen was the sole bidder for a rare Alberto Giacometti sculpture at Sotheby...

Guest Contributor

Why The Big Money Is Going To Europe

Nov 14 2014 | 6:03am ET

Peer-to-peer lending was invented with the individual investor in mind. But despite...

 

Sponsored Content

    For Hedge Funds, Mastering Data Is Key To Success

    Nov 4 2014 | 9:45am ET

    Data management is important to every business, but for hedge funds, it is critical. FINalternatives recently asked Peter Sanchez, CEO of Northern Trust Hedge Fund Services, how fund managers can deal with the demands of managing data while at the same time remain transparent and abide by operational best practices. Read more…

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

November 2014 Cover

Building a better market

Reg NMS created a huge bifurcation in equity markets and while much of what has followed has been positive, in terms of lower fees and greater liquidity, many traders would like to see the market come...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.