The Medusa Platform adheres to accepted industry wide trading protocols and provides a balanced model that delivers benefits to all participants to transactions.
Digital Vega is directly connected to most of the major Foreign Exchange Banks globally via FIX API’s delivering streamed pricing in 60+ currency pairs across a range of industry standard structures. Clients can access pricing from up to 5 bank providers in competition for their specific interest and are able to submit up to 4 requests simultaneously. The trading protocol is “disclosed” in that both participants to the request and transaction are advised whom they are dealing with. Medusa does not support anonymous trading.
Price responses are streamed to the client’s Medusa GUI for up to a maximum of 5 minutes from initial submission. Each time a new price update is received, Medusa recalculates and compares all live responses to highlight the best “all in “ bid and offer available to the client. Execution is via a single mouse click to complete the transaction. Clients are not forced to trade on the best available price, but can trade on any other price available at the time
Pricing may be delivered directly via a banks API pricing engine; in some cases, based on size or maturity, the outgoing price may need to be checked by a bank trader before submission ( Dealer Intervention or DI for short”
If no transaction takes place, the Price Response window closes automatically and the request stream is terminated. For reference, if a user executes a transaction with one of the provider banks, other providers are not advised that a transaction has taken place.
Trading over the Medusa platform takes place either bilaterally between clients who have existing limits with nominated provider banks, or via one or more Prime Brokers, all of whom provide full PB services to clients wishing to use the platform.
Types and Structures
Vanilla Puts and Calls, Straddles, Strangles, Risk Reversals, Generic 2 Leg Spreads encompassing: Simple or Ratio Put and Call Spreads, Simple or Ratio Calendar Spreads.
Pricing is available from overnight to 1 year and all structures can be priced with or without either spot or forward delta hedge.
Where relevant, users may enter a defined spot or forward hedge rate as part of the request; this rate will be used by the providers as a basis for the price response they send back.
RFQ / RFS
Clients can access indicative pricing from the Digital Vega platform based on aggregated market data and industry standard pricing models before you let banks know that you are ready to trade.
Once you are ready to trade, you can request tradable prices from up to 5 bank liquidity providers in competition.
Streaming Tradable Prices
The client can initiate the start of an RFQ/RFS Session by submitting a price request to up to five banks. In turn the banks can stream prices and updates for the duration of the RFQ Session.
Prices are streamed for up to 5 minutes with the best bid and offer highlighted dynamically as prices are updated.
During the 5-minute RFQ Session banks can:
- Auto-quote the price request and send tradable price quotes in response to the RFQ
- Divert to Dealer Innevension for manual pricing
- Decline to quote an RFQ
- Withdraw a previously submitted quote
- Update previously submitted quotes
When the 5-minute RFQ Session has expired any bank prices that are still valid (i.e., have a remaining time-to-live indicator that takes them beyond the 5 minutes and are tradable) will still be tradable until each individual quote expires.
Prices cannot be updated after the RFQ Session has expired.
Once the RFQ Session and all prices have expired the RFQ Session will come to an end and no trading will be possible unless a new RFQ Session is initiated
Trade ‘live’ or with a delta hedge
Clients can either trade ‘live’ (no hedge) or with a spot or forward delta hedge.
Not all provider banks are set up to price every structure or currency pair and users have historically seen “Unsupported” in the quote Response field.
In order to optimise the user experience, Digital Vega has created a Provider Substitution Algorithm that either manually or dynamically allows the user to close down individual requests to providers that are unsupported and immediately replace with another providers price and ensure that 5 prices are always available.
Order and Execution Management is an integral part of the work flow process for many of our clients. For compliance and control reasons a fully audited and automated solution is often essential.
The Digital Vega EMS services allow integration with in-house and industry standard OMS platforms. Orders can be loaded, staged, executed and booked with STP and with a complete audit trail of all activities.
Adapters have been developed for widely used OMS platforms such as Charles River Development and clients can integrated their proprietary OMS systems using our Orders API.
For a more lightweight level of integration Orders can be loaded using XLS and CSV formats.
Orders can be transmitted as as multi-leg strategies or parsed by our EMS to optimise single leg orders into more cost efficient multi-leg strategies.
Additional features allow control over direction of the order to prevent trading on the wrong side or control over bank mappings to restrict trading to predetermined provider banks.
As an additional services who regularly trade FX Options but occasionally need to execute a Spot FX transaction we have integrated with the Currenex Spot FX platform.
Clients can trade with a broad range of banks in a extensive range currency pairs. Real-time streaming top of book Spot FX pricing can be accessed from within the Digital Vega GUI and trades done with a single click.
Prime Broker Trades
Digital Vega offers a complete solution for Users who wish to trade via Prime Brokers.
The Medusa platform is already integrated to all major FX prime brokers and also integrated to Traiana’s Harmony network. The platform provides prime brokers with all necessary limit management tools and also a complete suite of reporting tools.
Active users who require the services of multiple prime brokers are already well served; Medusa allows instant and seamless switching between multiple prime brokers when required.
Prime of prime Model is in development, allowing white label clients to allocate and control limits to individual users, comfortable in the knowledge that Medusa will prevent them from breaching limits; This functionality provides real time monitoring of all limits: PB to client, PB to EB, Client to end users and will display all limit usage in real time.
Managing Prime Broker Mappings – Buy-side clients can trade on the Digital Vega platform using one or more Prime Brokers. A default Prime Broker can be assigned to each of the client’s funds or accounts. The Prime Broker/Fund/Account combination can be used to determine the eligible set of Executing Brokers that can be traded with.
Designation Notices – Clients can assign Prime Brokers based on funds or currency pairs to provide for their designation notices requirement and compliance mapping.
Give-up notifications – The Digital Vega platform is fully integrated with the Traiana Harmony network. Buy Side clients and Bank Liquidity Providers can elect for Digital Vega to send trade notifications to Harmony for automated matching.
Prime of Prime – Digital Vega has implemented a two-tier Prime Services model sometimes required by FX Aggregators. A Prime Broker can allocate trading limits for an FX Aggregator with each Executing Broker and in turn the FX Aggregator can assign account or client level limits.
Digital Vega is currently not registered as a SEF. This was a conscious decision as there is still significant uncertainty around timings of clearing mandates and the regulatory requirements implemented by the CFTC are currently very restrictive and unnecessarily onerous.
State Street corporation already has an established SEF entity SwapEx, established in the United States. Work has now started in partnership with Currenex to extend the existing integration to deliver an FX option trading capability into the SwapEx entity to deliver a full SEF trading capability to US persons via Swapex.
Please contact us for further information