Hotspot FXi Inc, which runs an online currency trading platform, said on Friday its volume was likely to surge 150 percent this year, as in 2004, as more hedge funds use its terminals for spot transactions. New Jersey-based Hotspot has added the Singapore dollar to the list of 18 major currencies that can be traded through its system as it aims to grab a bigger slice of the trading done by hedge funds, which are expanding their business in Asia.
It opened an office in Singapore on Friday and has also opened a representative office in Beijing to expand its presence in the region. It hopes to add 50 to 100 clients in Asia, mostly hedge funds, in the next 12 months as part of a regional push.
"Asia is quickly adopting e-trading in foreign exchange," said John Eley, Hotspot's chief executive, in an interview in Singapore. "More and more foreign exchange transactions in the region are going to be done electronically." Venture-capital-backed Hotspot is ranked third in the currency multi-dealer platform segment behind FXall, owned by 17 banks, and State Street's Global Link/FX Connect, according to industry research.
Only a small slice of currency trading goes through such platforms.
More than half of the world's total daily currency transactions totalling $1.9 trillion are conducted between banks through electronic systems such as those run by EBS and Reuters Group Plc.
Research consultancy ClientKnowledge estimated in March that daily turnover between banks and clients, including hedge funds, mutual funds and companies, amounted to about $600 billion a day, or less than a third of the total daily volume.
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