Exness’ pricing solutions
By Reem Bacha
28 December 2023
If you’ve been following this series of articles exploring how institutions, banks, and brokers generate prices, you know more than the majority of today’s traders.
But now, it’s time to talk about Exness. What is our pricing approach, and why is our pricing, along with the rest of our trading conditions, up to “better-than-market” standard? Let’s dive in.
Quality price sources
Firstly, let’s address the quality, diversity, and number of our price sources. We believe that information is extremely important, and our aim is always to provide the most accurate representation of the real market state.
We value quality, source diversity, and advanced technological solutions. As a result, we work with multiple price data providers, including the most reputable exchanges, data vendors, and trading venues. We monitor the quality of the feeds around the clock for each instrument, to ensure it always meets our standards.
Fastest connections to price sources
We connect to our price sources using our own custom-built solutions, to get pricing in the fastest available way - e.g. by cross-connecting in LD4. This minimizes latency and ensures we receive price updates as they happen.
Advanced in-house aggregation
Once we receive raw prices, which may at times consist of thousands of bid and ask ticks, we analyze them and carefully select the feeds to use with each instrument, in order to optimize output price-quality. We then apply sophisticated proprietary algorithms to aggregate the data and create our own price with our own spread, carefully configured for every single instrument.
These spreads are independent of those we receive from our sources, allowing us to keep them low and stable regardless of our providers’ pricing.
Comprehensive pricing protocol
By controlling every step of the price-provider-connection and aggregation chain, and carefully tailoring the logic to each instrument, we maximize the chances that our prices represent the actual market and are in alignment with the most reputable market participants. This is always our aim, even if it means that sometimes, discrepancies may occur between us and other smaller liquidity pools.
Pricing is and will continue to be, a long-term priority of ours. Not only do we provide the most competitive and stable spreads, but we maintain stability and uptime and accurately reflect actual market levels.
Off-market pricing protocol
On the rare occasion that we do receive an off-market price from a source that ends up affecting our own pricing, our response is always to take responsibility and immediately resolve the issue. Minimizing the potential impact on our clients is priority number 1.
We always compensate clients who are negatively affected by the incident, and we do not remove profits from clients who may have benefitted from the bad price. Our values and principles guide us in everything we do, and we are committed to providing the best trading experience on the market, no matter what.
Instead of dodging responsibility, we use these off-market price incidents to improve our pricing models to prevent similar instances from happening again.
So what’s our secret to better-than-market pricing?
We follow a series of principles that allow us to provide better and more accurate pricing. Here’s a quick rundown of what they are:
We never interrupt our pricing aftermarket news. We filter as little as possible, and we diversify our price sources across many providers. We also have fast, and redundant connections with them, to maximize pricing uptime.
We have our own logic for pricing, which we developed ourselves with a team of skilled quantitative researchers. We created a method to keep spreads stable and tight even if the source spreads fluctuate and are wide. When liquidity and price quality in the market are poor, we create our own pricing models, to improve our confidence in the accuracy of our pricing and therefore provide more stable and tighter spreads to our clients than what’s available in the market.
We try to maximize our clients’ chances of success, so we keep our spreads tight and stable as much as possible and execute orders without market impact (i.e. large orders get filled with the same tight spreads as small ones). This results in our spreads often being tighter than the real market. For example, check out our spreads around major market news such as the NFP or US CPI, compared with other sources.
We listen to client feedback and focus on the rare times when things go wrong, in order to use them as an opportunity to improve our product. We have a dedicated team working on improving our pricing, who monitor it at all times to ensure our clients have a seamless trading experience.
The result of all this is carefully crafted pricing that reflects the real market state, with reduced spread reactions to volatility, illiquidity, or major market news; pricing that over 700K active traders enjoy.
This is not investment advice. Past performance is not an indication of future results. Your capital is at risk, please trade responsibly.
Reem Bacha is a dedicated content professional and product communications specialist with over 8 years of experience in the FinTech sector.