The retail revolution continues...

A rumour circulating the market is that Goldman Sachs is looking to establish deals to be the exclusive liquidity provider to certain platforms by offering extremely low prices. Indeed, most banks have found in their flow analysis that they can afford to get away with tighter pricing because of the quality of the flow, and that it can be monetised better than, perhaps, some more challenging institutional flow.

If Goldman Sachs can guarantee that pricing will remain as is, particularly given the increase in the price of liquidity in recent weeks, it should be on to a winner. Overall, most liquidity aggregators and retail shops have until now managed to get net spreads, as a result of their multi-contributor feeds, that have ended up half a pip wide. However, recently the rumblings are that this is no longer the case - spreads are a lot wider and a lot of individual bank feeds are now regularly on two pips. Even if they are aggregated, the bid ask has widened.

It should be interesting to see how retail platforms that publish two-pip euro spreads will be able to sustain this if the cost of liquidity gets higher.

In another new initiative, Barclays Capital is due to roll out Barx for retail foreign exchange traders. It is understood that the technology for this system was developed by FX technology vendor Integral, based in Mountain View, California. This service will be run in parallel to that of Barclays Stockbrokers, where clients can trade FX through contracts for differences with City Index.

On the brokerage side, last week futures clearing firm Rosenthal Collins Group (RCG) said it would launch an online trading company in the UK with retail FX company Gain Capital Group.

The two US companies plan to have an online trading platform operational by the end of the second quarter. The new entity, to be known as RCG Gain, will provide online trading in futures and FX to retail investors in the UK, with additional plans to extend the trading service into the European Union.