Cross Market Pricing Engine

Seamless currency conversion and pricing for cross-market trading

Cross Market Pricing Overview

Touch-Fire's Cross Market Pricing Engine enables traders to access liquidity across different currencies and markets through a single unified interface. By automatically handling currency conversion and cross-market pricing, our solution opens up global trading opportunities while simplifying the user experience.

Originally developed to address the challenges of cryptocurrency/fiat trading pairs, our engine has evolved to support a wide range of asset classes and market structures, providing real-time pricing and conversion between any combination of markets and currencies.

How It Works

The Cross Market Pricing Engine creates virtual order books by combining multiple sources of liquidity and applying real-time currency conversion.

For example, when trading Crypto/JPY:

Liquidity Aggregation: The system connects to multiple Crypto/USD markets and FX USD/JPY markets
Real-time Conversion: Applies FX rates to create a virtual Crypto/JPY order book
Client Request: When a client places an order in JPY, the system routes it to the virtual book
Auto-Matching: The order is matched in the virtual book at the JPY price
Cross-Market Hedging: Simultaneous hedging orders are executed in the underlying USD markets and FX markets

This process happens in milliseconds, providing seamless execution for the client while automatically managing the currency risk for the broker or exchange.

Key Features

Multi-Currency Support

Seamless trading across any currency pair with real-time FX conversion and consolidated position management in the base currency.

Liquidity Aggregation

Combines liquidity from multiple venues and currencies into a single virtual order book, providing better pricing and depth for clients.

Automated Hedging

Sophisticated hedging algorithms automatically manage currency and market risk across multiple venues, optimizing execution and minimizing exposure.

Smart Order Routing

Intelligently routes orders to the best available liquidity across multiple venues, considering price, cost, and likelihood of execution.

Advanced Price Discovery

Sophisticated algorithms for determining fair prices across markets with different characteristics, currencies, and trading hours.

Comprehensive Risk Controls

Real-time monitoring and management of market, credit, and operational risks across all currencies and venues with automated risk mitigation.

Application Scenarios

Crypto/Fiat Trading

Enable cryptocurrency trading in local fiat currencies by leveraging global USD liquidity and applying real-time FX conversion, expanding market access while simplifying the user experience.

Regional Exchanges

Allow regional exchanges to offer international products in local currency, creating new trading opportunities without requiring users to manage multiple currency accounts or FX exposure.

Multi-Asset Brokers

Provide a unified trading experience across multiple asset classes and currencies, with consolidated position management, margin calculation, and reporting in the client's preferred currency.

Technology Architecture

Our Cross Market Pricing Engine is built on Touch-Fire's modern technology stack, designed for high performance and reliability.

Technical Components

High-Performance Order Books: Memory-optimized data structures for real-time price aggregation
FX Conversion Layer: Low-latency currency conversion with support for multiple pricing sources
Smart Order Router: Sophisticated order routing algorithms with venue selection optimization
Risk Management Engine: Real-time risk assessment and position monitoring across all markets
Hedging Automaton: Rule-based system for automated risk management and position balancing

These components work together to provide a seamless trading experience for end users while ensuring efficient risk management for the operator.

CASE STUDY

CRYPTO BROKER IMPLEMENTATION

CROSS MARKET PRICING AND HEDGING SOLUTION

BROKER NEEDED TO IMPROVE PRICE SPREADS

The broker was operating a widely used crypto wallet, offering crypto trading in JPY. However, market making pricing was much more competitive in USD. They therefore wanted a solution to aggregate quotes from multiple sources (both JPY and USD) and hedge these USD trades in real-time.

The solution provided by Touch-Fire was a matching engine that was able to apply aggregate FX conversion books to any source books, and generate prices in JPY, and then hedge resulting JPY trades across any number of legs. This included real-time position management across both crypto and fiat currencies, with automated hedging to minimize exposure.

Following the implementation, the customer was able to choose liquidity providers from any of the available international LPs, resulting in tighter spreads, better execution quality, and increased trading volumes. The automated hedging eliminated manual intervention, reducing operational risk and enabling 24/7 trading.

Integration Capabilities

Our Cross Market Pricing Engine is designed to integrate seamlessly with existing systems and external venues:

Market Data Providers: Connectivity to major FX and market data sources for pricing
Liquidity Venues: Integration with exchanges, ECNs, and market makers across all supported assets
Trading Platforms: APIs for front-end systems to access the virtual order books
Risk Systems: Real-time position and exposure information for risk management
Back Office: Integration with clearing and settlement systems for post-trade processing

The system can be deployed either as a standalone solution or integrated with other Touch-Fire components such as the Match! engine, back office systems, and risk management tools.

Ready to explore cross-market opportunities?

Contact us to discuss how our Cross Market Pricing Engine can help you expand your offering with multi-currency trading capabilities.

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