Pricing Strategy Analysis And System Design Of Foreign Exchange Trading System

Foreign exchange is the conversion of one country’s currency into that of another. It is athe ubiquity of the market, because the earth’s rotation, it began from Monday in NewZealand Wellington to to Friday in Chicago closing, and has different market open to the dealin many countries, forming a24hours service trading market. The foreign exchange marketis the globalization of the market, and due to the information technology and the rapiddevelopment of Internet, the present foreign exchange trading has the electronic tradingsystem for quotation, trading, hedge. Any market is influence of supply and demand, eitherthe foreign exchange market, in addition, a country’s overall economic strength andinternational balance of payments situation is also the basic influence factors. In thefluctuation of exchange rate, the interest rate change is the most basic research, a gapbetween two countries’ currency interest rate level is the fundamental background factors oflong-term trends. Earn commission is the only source of profits of the trading system.This paper studies foreign exchange trading system of quotation strategies, and itssystem logic design, architecture design, the system background is a one of the world’s largestBanks quote rate and liquidity service system (Quoting&Liquidity Service), servefor the world’s large bank or foreign exchange dealers offer andtrading.This paper does not stand on detailed modules and code, but to focus on the pricingstrategy logic and architecture design. The author believes that, a reasonable and rapidresponse market supply and demand of foreign exchange rate, and protect customers and theirbilateral interests, can attract more traders participate in the system.The design of the pricing strategies mainly includes:1. Two price Model. VFP namely Volume For Price, and PFV namely Price For Volume2. Pricing Group. The same currency to different offer group can have different price.Due to the size of the dealer credit, the exchange rate to provide preferential is different also.3. Maximum Liquidity. Based on the different currencies and different pricing group,price less than maximum liquidity, can protect the bank.4. Frequency Update. Stream the exchange rate to client in a fixed frequency5. Liquidity Throttling. What liquidity that client can see after it completed a transation.6. Liquidity Reservation. Before provide price to client, price of customers can besubtracted in advance.Quotation strategy system design mainly includes below components: 1. The exchange rate by the Core Price Engine in inter-row market acquisition currencyexchange rate, mainly from Reuters Reuters Dealing, and Electronic Brokerage services(Electronic Brokerage Service, EBS), Deutsche Bank, JP Morgan Chase, Citibank, UBS.Acquisition Price also will offer issued to a public middleware server (Price Data Service,PDS)2. Quoting and liquidity service system monitoring the price of PDS and through theinternal mechanism integrated into a finished product price, delivery to the correspondingcustomer.3. Financial Information Exchange Engine,(FIX Engine). Clients should be required toFIX agreement with sending and receiving quotation Information.4. Each Service or components Configuration information are made by commonConfiguration services (Center Configuration Service) to provide.