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New FX Venues Emerge
Challenging the establishment – new FX venues emerge. David Mercer, LMAX Exchange CEO, shares insights.The first generation of FX electronic trading venues initially emerged in the interbank market in the early 1990s. Both Reuters and EBS have remained traditional powerhouses in the electronic FX market since their launches, supported by the dealing banks that relied on the two venues to manage their risk in a timely manner.
The second wave of significant changes in the electronic FX market occurred during the late 1990s, when numerous electronic platforms surfaced to address trading issues in the client-to-dealer market. While most of those venues, such as Atriax, Lava, and FXMarketspace, ultimately ceased operations due to lack of market adoption, the few that survived, including Currenex, Hotspot FX, and FXall, form the backbone of today’s established FX ECN players.
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4 key fundamentals to consider when choosing an FX venue
While FX as an asset class might be straight forward, customers that play in the FX market have different needs and requirements.
For those corporations and traditional asset managers that view FX transactions as a byproduct of their core business (e.g., cross-border transactions), for example, overall costs associated with execution might be less of an issue; these customer segments would also view access to large size as important, leading them to trade on RFQ-based MDPs and SDPs. On the other hand, statistical arbitrage and actively trading hedge funds and HFT firms might care more about cost of execution since they deal with smaller-sized but more frequent transactions, leading them to use ECN/MFT-type execution venues.
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LMAX eyes US market play
Wall Street Letter, June 2013 – A US-based matching engine may be in the cards for LMAX Exchange, the London-based multi-lateral trading facility for foreign exchange, according to CEO David Mercer. The company is looking into New York as the location for a new matching engine, he said. “All the major players have matching engines […]
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The changing nature of FX trading and the importance of a client-centric business strategy for maintaining the growth momentum
LMAX Exchange CEO, David Mercer, talks exclusively with Profit & Loss Editor, Colin Lambert, explaining the key drivers behind LMAX Exchange’s growth in the marketplace and the company’s continuous focus on delivering benefits to its clients, traders and liquidity providers. Please find the discussion highlights below and watch the video: What does it […]