What we do
Supported by our proprietary technology platform, we provide liquidity in financial products that helps contribute to more efficient markets by lowering overall trading costs, delivering greater execution quality and market transparency. Moreover, providing liquidity allows investors to continue to buy or sell ETPs or other financial instruments even during periods of heightened market volatility. By continuously providing liquidity we make sure that markets remain resilient and continue to function in an orderly manner. In effect, we act as a stabilising mechanism which helps to absorb market shocks.
As a liquidity provider, we help maintain and improve the overall transparency and efficiency of the ecosystem, by quoting bid and ask prices for financial products like ETPs, FX and other products on trading venues, as well as off-exchange to institutional investors, which market participants can trade against. By providing liquidity we make it easier for investors to buy and sell financial products at a price that should reflect the (relation with the) current price of the underlying asset, and contribute to lower trading costs.
We provide this liquidity via two main routes: “on screen” which is conducted on stock exchanges where Flow Traders is a registered market maker in ETPs and “off exchange” where we trade bilaterally with institutional counterparties, often through Request for Quote (RfQ) platforms such as those operated by Tradeweb and Bloomberg.
Another role we play in the ETP landscape is as an Authorized Participant (AP). We have AP-agreements in place with all the major ETP issuers. These agreements link the primary and the secondary ETP market and allow us to either create or redeem the ETPs and optimize our role as a leading liquidity provider in ETPs.
ETPs provide investors with exposure to a wide variety of underlying assets, ranging from ETPs that replicate the composition of a particular equity index, to those that provide investors with exposure to assets in specific sectors or countries, to commodities, or to currencies. There are broadly three main categories within ETPs : Exchange-traded Funds (ETFs), Exchange-traded Commodities (ETCs) and Exchange-traded Notes (ETNs).
We have commenced the diversification of our market making activities into other asset classes, such as Foreign Exchange (FX), commodities, cryptocurrencies and fixed income.
Foreign Exchange (FX)
Flow Traders started providing liquidity in FX as a separate asset class during 2018 and we have invested further in the business in order to drive growth in 2020. We provide liquidity in an increasing number of FX pairs on spot and futures in the EMEA and APAC markets to a fast-growing number of counterparties on an expanding number of platforms. In 2020, Flow Traders also became a top three market maker on major FX ECNs (Electronic Communications Networks) in spot metals.
Flow Traders is the number one market maker in cryptocurrency ETPs being active on 15 exchanges globally, providing 24/7 liquidity. We are also a leading spot OTC liquidity provider. We have seen that there has been a continued adoption of this asset class by institutional investors with subsequent inflows in cryptocurrency ETPs and ETNs.
Flow Traders expanded into Fixed Income in 2021, providing liquidity in European and North American investment grade, high yield and Global Emerging market sovereign bonds. We provide pricing on Bloomberg, Tradeweb, MarketAxess, LedgerEdge and distribute real-time axes on Neptune, in addition to these trading venues. We support all trading protocols, including Request for Quotes (RFQ), List and Portfolio Trading. Flow Traders continue to gain market share in the asset class as a provider of alternative liquidity, supported by our market leading Fixed Income ETF franchise.