LSEG Unveils New Post-trade Offering to Reduce FX Options Market Risk

LSEG’s Post Trade Solutions has launched a new service – Market Risk Optimisation – to reduce market risk, specifically for FX options.  According to a story in MarketsMedia news, the new offering integrates with LSEG’s multibank FX platform, FXall, and is expected to allow market participants to trade in and out of market risk, enhance liquidity and reduce transaction costs through access to a wide range of trading opportunities.  The development of the product has also involved industry input, following a successful proof of concept through the input of 13 sell-side FX options desks.  Andrew Williams, Chief Executive of Post Trade Solutions at LSEG, said: “Since launch, our optimisation runs have helped to reduce resource requirements, with a focus on counterparty risk. The next logical step in the evolution of our services is to use optimisation to reduce market risk.” Specifically, the service analyses participant axes across a variety of tenors and risks, to then suggest an optimised set of trades that fit within a client’s specified constraints.  Additionally, the end-to-end process is designed to be completed within 30 minutes and run at any frequency required by the market, to ensure it is responsive to market changes.