Bloomberg News reports that the market-making arm of money manager and securities firm Citadel said its foreign-exchange activity on June 24 surged to more than four and a half times the firm’s daily average this year.
The company declined to provide a dollar figure. The U.K. vote to leave the European Union also led to a surge in volume across trading venues run by Thomson Reuters, Bats Global Markets and FastMatch as the pound tumbled to a three-decade low.
“The next few weeks are going to be volatile as the situation continues to unfold,” said Jamil Nazarali, head of Citadel Execution Services in New York. “There is a mis-perception that nonbank liquidity providers pull out in times of stress and extreme volatility and June 24 proved that this was definitely not the case. We did what we do all of the time and people noticed it.”
As banks adapt to stricter regulation by stepping back from foreign-exchange market making, firms including hedge funds and proprietary traders are moving in to provide more liquidity, according to a survey by Greenwich Associates published in May.
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