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LMAX Group blog - FX industry thought leadership

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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.

  • 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.

  • 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 […]

  • What will drive further adoption of electronic trading?

    Electronic trading execution methods (as defined by BIS) account for 55% of all spot trading, represented collectively by electronic broking (interbank), MDPs, and SDPs. Of the three electronic execution methods, interbank systems (i.e., EBS and Thomson Reuters) have one of the largest shares of the spot FX market, at 26%.

    Retail aggregators do not appear on this execution venue list because they are counted as bank clients in this BIS survey. Inter-broker dealers like ICAP and Tradition capture 47% of FX swap business (voice broker plus inter-dealer direct percentages) as well as 35% of FX options volume.

    When looking at electronic trading platforms, both single- and multibank platforms compete actively in two markets: FX spot and outright forward markets.

  • 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 […]

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