SFOX unveils first hedge fund specific crypto trading platform
Digital asset prime broker San Francisco Open Exchange (SFOX) has unveiled the first-ever cryptocurrency trading product built specifically for hedge funds and asset managers that will provide capabilities previously only accessible by the market’s largest firms.
The broad suite of sophisticated trading and portfolio management services will allow hedge funds for the first time to execute sophisticated trading strategies at scale. In a single platform, SFOX delivers best price execution through deep global liquidity, advanced order types and execution algorithms, treasury management, and detailed trade analytics with flexible settlement ensures fund managers can capitalise on every opportunity presented in the market.
“This first of its kind crypto trading platform is the right product at the right time as institutions of all kinds are rapidly transitioning to investing in digital currencies,” says Chamath Palihapitiya, Founder and CEO of Social Capital, an investor in SFOX. “The technical superiority and unmatched cryptocurrency liquidity at SFOX will bring the hedge fund industry the trading, reporting and compliance services institutions need to embrace cryptocurrency as a new asset class.”
Unlike typical exchanges, SFOX provides traders with a single destination for trading cryptocurrencies from the world’s foremost trading venues - including major exchanges, OTC brokers, market makers. This access to all major trading platforms from a single destination gives hedge funds an edge across the highest priority trading areas: better pricing, enhanced access and best-in-class security. Just as Amazon became the marketplace for buying from many stores and sellers at a single location, SFOX is creating a similar marketplace for crypto. The aggregated liquidity of crypto on SFOX is so vast that a single USD50 million trade of bitcoin would execute in milliseconds without moving the market – 10x more than any exchange.
The most powerful of the SFOX platform’s services is unparalleled plug and play order types and execution algorithms that are tailored to meet the needs of any trading strategy. More than a dozen order types can be utilised that provide traders with complete control over how passively or aggressively to execute, how much information they are giving to the market, risk management, and impactful price improvement all of which ultimately result in higher returns and are available at no extra cost.
“As a former hedge fund manager, I can say that the platform we are introducing today is a total game-changer for funds that are either in crypto today or just beginning to embrace crypto trading,” says Jackson Finio, Head of Product at SFOX. “Hedge fund managers can focus on what they do best, trading, without having to worry about execution, scalability, capital efficiency or any of their back-office reporting and operational requirements.”
SFOX is also unveiling a proprietary Trade Cost Analysis (TCA) program that for the first time is integrated into a crypto trading platform and at no additional cost. TCA platforms for equity trading, for example, are limited solely to large firms that either build their own or acquire these services at a significant cost. TCA capabilities also enable Funds to meet and implement best price execution requirements in crypto for the first time. Funds currently must meet best price execution requirements in trading other equities to demonstrate to clients and regulators that firms are making their best effort to acquire assets for clients at the best price.
“We’ve built a platform that gives any hedge fund access to all the same tools and resources previously only accessible and available to the most well-resourced trading firms in the world and at no to low cost,” says Akbar Thobhani, CEO and Co-Founder of SFOX. “We know that running a fund is hard. When a market and regulatory environment are already fragmented and constantly changing, it makes running a crypto fund even harder. We want to be an ally to every hedge fund embracing cryptocurrency investing and trading.”
Hedge funds are SFOX’s fastest-growing trading segment, with 18x increase in trading volume year over year. Hedge funds in particular are finding compelling opportunities that drove a 10x increase in the average volume per customer over the past year.
SFOX also offers flexible settlement options, including Instant Settlement for pre-funded transactions and Post Trade Settlement (PTS), which allow hedge funds to avoid pre-funding using a line of credit granted by SFOX. With PTS, hedge funds can trade on credit and settle any outstanding amounts flexibly on a timeframe that suits a trader's needs, ensuring they never miss an opportunity due to insufficient funds.