For a true feeling of “being in the markets,” nothing beats working on the rates desk. The desk is still largely dominated by humans, not algorithms, and is constantly in flux. It involves constant repositioning of books via future contracts. This makes it a dynamic space that will most likely never be fully automated, and it has a high client flow.
Barclays is a global investment bank that specializes in trading foreign exchange, commodities and currencies. The company has been in the industry for over a century and remains the top player in the market. However, the firm’s proprietary trading and research activities have been under pressure from shareholders to be disposed of. However, Jes Staley, the former head of JPMorgan’s investment bank, has committed to keeping these businesses at the company. He has made it clear that his objective is to grow Barclays into an investment banking giant.
The firm recently completed an overhaul of its electronic trading products, including its flow platform and Dynamic Router. The new platforms have improved efficiency in trading by enabling better order routing. High-touch volumes as well as low-touch volumes have increased. Additionally, the firm has increased the amount of trading that passes through LX. The firm attributes its success to a number of factors, including increased customer awareness of the firm’s products.
The Barclays XvA best rates Trading Desk offers clients an unparalleled range of electronic trading tools, including market data and real-time price quotations. Through permission-based systems, the trading desk manages client electronic trading flows. Its members are empowered to view detailed transaction and order information.
The desk’s technology includes an order router, which receives posted order information from LX. This data includes aggregated buy and sell interest by symbol and is pegged to the current National Best Bid Offer. The data provided by LX is confidential and not shared with other systems. However, Barclays staff may need to access this information from time to time.
Barclays uses Liquidity Profiling to rank Subscribers. The system calculates alpha by looking at midpoint-to-midpoint market movement over a one-second horizon and normalizes it by daily average spread. This system places Subscribers into Low, Medium, and High alpha categories, and LX places orders into the Low alpha category.
Barclays One-touch best rates trading is available to clients with a minimum of £500 and can be accessed through its web trading platform or mobile applications. The brokerage charges 0.01% p.a. for all assets and fees. However, clients can connect a function that gives them interest on unspent funds, and Barclays offers a range of ISAs and SIPPs.
Barclays also offers a range of brokerage services. It does not make empty promises and follows through on agreements. For example, it offers balanced portfolios, which are composed of different funds with different levels of risk. These can be customised to match an investor’s trading strategy and investment goals. It also responds promptly to withdrawal requests.
The new functionality will allow Barclays’ low-touch order flow to be advertised in real time on Bloomberg’s IOIA network. This will allow institutional investors to view the firm’s trading activity by low and high-touch execution channels. Before, Barclays had only posted high-touch orders on the network. This new functionality is expected to increase liquidity and block trading.
While the overall market is still down, Barclays’ corporate & investment bank segment grew about 20% in the first half of the year. This growth is due in part to higher trading volumes and investment banking revenue. However, this growth rate is unlikely to last forever. The company’s provision for loan losses has increased four times in the first half of 2019. The negative economic outlook will make it more difficult for Barclays to attract funding and will increase the cost of operating the company.
Franklin Templeton Investments has a process to limit access to certain company files. These files contain sensitive information and are stored on computers. Those who have access to these files are issued personal identification numbers and passwords. They are monitored on a regular basis and are only permitted to access the information they need to do their jobs.
The company also publishes a newsletter, Notes from the Trading Desk, which offers a weekly overview of the markets. The team is based in Edinburgh, Scotland, and is part of the Templeton Global Equity Group. Although the team’s views are their own, they do not represent investment advice.