What makes you think this will be so good? CME release new instruments every so often but only a few get sufficient volume to be of much interest.
I think that this has a legitimate shot at flying because there are 2 major financial institutions involved. Why would Reuters cannibalize there current currency offerings unless they were deadly serious? Attempts to centralize spot are not new. How much further in the future until someone gets it done? I am not going to post color and comments from speaking with CME FX Marketspace staff as it is better that they speak for themselves- call them up, they are most available to discuss... This is a 50 caliber sniper rifle intended directly for a lot of the current spot forex market makers. I would like to see some one shot, one kills go down in the next year...
While this may be a viable alternative to the current offerings out there I think many who are simply gushing about this should consider a bit of history here: The successful and rapidly growing forex dealers of today came into being partly because of the very inefficient operations of the CME in the first place. The IMM of the CME (where currencies are/were pit traded) was an open outcry mess. While many considered it the ultimate price discovery vehicle for currencies it was, say ten years ago, before the retail forex dealers of today evolved, a difficult, sometimes very expensive place to deal with. The open outcry system was a joke that greatly favored floor traders and the "locals", as they are called, who stood there all day long to pick off customer orders and often run stops. You could say it was far more of a viper pit than a trading pit. Following at least one highly publicized FBI sting operation the exchange finally acted to tame many offenders who made massive livings off of raping the retail (and even institutional) customer orders that were flashed or hand delivered, sometimes rather slowly, into the pit for execution. Often it would take ten, twenty, sixty or far more minutes to get a market order confirmation back from the pit. Cancel replaces often were "too late to cancel", in other words it took so long to run the cancel/replace order into the pit, find the old order in the clerks hands, pull it out and get the new order back in the deck, the market would have already moved to the old price and would be filled. The confirmation or "too late to cancel" advice could take anywhere from a few minutes to hours to finally get back to the customer. While this comedy of errors went on, often to the huge benefit of the locals, the exchange did nothing to change things in favor of customers for years and years. Why? Because the members of the exchange were the same guys in the pit making all the money off of the misfortune of customers that all of this inefficiency caused! The crooks were the "house" and got to make all the rules. So what changed? Competition! The forex dealers of today got themselves good software and started offering 24 hour service and excellent spreads. The CME held their line for years and simply tried to lobby congress and the NFA and CFTC to get rid of the forex dealers. Finally when that didn't work they decided the old pit trading business was going to become obsolete (though it already had several years before) and exchanged exchange seats (memberships) for stock in the CME and took it public. Why the delay? There was simply too much money being made by those members on the trading floor executing orders and scalping and running stops and you name it. They finally figured out they'd be totally out of business if they didn't give up the greed and try to move into the new age of technology. So here we are, after around 8 or 9 years of retail forex going quite nicely with the very successful and entrepreneurial forex dealers, the CME does this deal with Reuters and so many think these are the good guys with the white hats who are going to give everyone a great deal! Maybe it will be competition that will give customers a better deal and maybe not. I'd just suggest a bit of caution because these are still the same guys except now they are not pit vipers but stockholders of a publicly traded futures exchange out to make as much money as possible. Make no mistake they are upset at the forex dealers because they, in part, pulled the rug out from under their very profitable little trading pit operation so they would love a little revenge. They might also get it right this time. The forex dealers, however have been getting it right and offering amazing deals to retail customers for several years now so I'd not jump to the conclusion that this Reuters/CME deal is going to be any better. I'd guess at best it could be a reasonable alternative but the ability of the forex dealers to adapt has been proven
"The forex dealers, however have been getting it right and offering amazing deals to retail customers for several years now" You are joking, right? What occurs with most spot fx buckets illustrates how every financial regulatory body has zero effectiveness... Some decent offerings with lots of fun and games mixed in. Organizations change - sometimes for the better, sometimes for the worse...
Few traders are disappointed with Oanda. If you outgrow their $10M single trade limitation, good for you!
This is huge, hope they implement this platform ASAP. At the very least, it would produce the "official" forex quotes database. Current databases like tullet, whatever, have too much noise and there is no way to figure "referential quotes" from actual trades. It will increase FX trading volumes due to improved transparency. There are definitely encroached interests that will lobby to shelve this project.
Just for your information, CME's FXMarketSpace is limited to institutional users only, and is not available to retail users.
It's true in the sense that a retail individual will not have direct access to it just like they don't to Reuters Deal book. But retail brokers and MM and the banks they deal with will have access to it. So in that sense, you will have access to it via your broker or MM. I think the creation of FXMarketPlace will help the Spot FOREX industry move faster from the market-maker model to the ECN model.