LMAX Exchange: Agile Challenge to the Status Quo
Automated Trader, October 2012 – LMAX Exchange is an exponent of the agile development methodology, but does that agility also extend to the business as a whole? In this issue’s Exchange Views, David Mercer, CEO, Andy Phillips, Head of Systems and Mike Barker, Head of Software, describe how LMAX Exchange has evolved both rapidly and sometimes in unexpected directions over the ?ve years since its inception.
What were the origins of LMAX Exchange?
David Mercer: It was born from the Betfair new ventures team in 2007, which was trying to take maximum advantage of the very strong exchange technology they had already developed. To put it in perspective, Betfair matches 7,000,000 orders a day, which is more than all the European stock exchanges put together. So it was hardly a massive leap to take the decision to look at mapping that technology to an exchange for financial trading.
LMAX Ltd was the result of this decision and LMAX Exchange was launched at the end of 2010. Initially, it didn’t really get the traction it deserved, perhaps because it was directed only at a Betfair style audience, who would probably be best described as retail users. By April 2011 it was increasingly apparent that the product actually had a much broader scope than that, and that in terms of functionality wasn’t a purely retail product in the same way as the Betfair exchange.
So how did you respond to that?
David Mercer: We felt that we had a very fast, robust and scalable exchange, which would be appropriate to a much broader range of clients in terms of size and sophistication. I joined LMAX Exchange at the end of April 2011, and at that point we took a close look at who the target client segments should be, which products we should focus on, and how we should be structured internally. On the basis of that re- evaluation, we re-launched in September 2011.
Although we are still relatively small, we have grown substantially, so that we now often match $3 billion in a day and $30 billion in a month. Liquidity has increased due to a growing number of General Members (in LMAX Exchange parlance market makers are General Members). We initially had three, but now have eight, and that will soon be in double fi gures, which we expect will deliver better top of book pricing and liquidity.
Our main traction in the marketplace currently seems to be with retail brokers. However, because of the exchange’s functionality and range of markets, we are also seeing a growing number of money managers, funds and professional traders. So we would now classify ourselves as a professional exchange rather than the direct to retail-only organisation we once were. Since late 2011 we have also been working on building out the product set, which now consists of more than 70 products. Obviously, growing the number of FX pairs has been a major part of that, but we’ve also added spot gold/silver and the major indices..…
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For further information please contact:
LMAX Exchange (London):
Barbara Pozdorovkina T: +44 20 3192 2510 E: [email protected]
About LMAX Exchange
LMAX Exchange Group is a dynamic, visionary and award-winning financial technology company. Recognised as one of the UK’s fastest growing technology firms, LMAX Exchange is leading the transformation of the global FX industry to transparent, fair, precise and consistent execution. Operating one global marketplace for trading FX, metals, indices and commodities, LMAX Exchange delivers open access, transparency and a level playing field to all market participants.
LMAX Exchange Group offers all clients the ability to trade on LMAX Exchange central limit order book, driven by streaming no ‘last look’ limit-order liquidity from top tier banks and non-bank financial institutions. Servicing funds, banks, brokerages, asset managers and proprietary trading firms, LMAX Exchange offers an anonymous, regulated, rules-based trading environment, order execution in strict price/time priority, and access to real-time streaming market and trade data, enabling all market participants to control execution quality and total trading costs.
Offering a comprehensive range of instruments and ultra-low latency execution, LMAX Exchange operates a global FX exchange infrastructure with matching engines in London, New York and Tokyo.
LMAX Exchange - a unique vision for global FX.
Financial technology awards:
2017 Best FX Trading Venue - (ECN/MTF) – Fund Technology and WSL Awards more
2016 Best Trading & Execution Technology – HFM US Technology Awards more
2013 Best Overall Testing Project – The European Software Testing Awards more
2011 Best Trading System – Financial Sector Technology Awards more
FX industry awards:
2017, 2016, 2015, 2014, 2013 Best FX Trading Venue - (ECN/MTF) – WSL Awards more
2017, 2016, 2015, 2014, 2013 Best Margin Sector Platform – Profit & Loss Readers' Choice Awards more
2017, 2013 Best Execution Venue – Forex Magnates Awards more
2014 Best Infrastructure/Technology Initiative – WSL Institutional Trading Awardsmore
Business growth awards:
2016, 2015 Winner – Deloitte UK Technology Fast 50 more
2016, 2015 Winner – Deloitte EMEA Technology Fast 500 more
2015, 2014, 2013 Fastest Growing Tech Company in the UK – The Sunday Times Tech Track 100 more
LMAX Exchange Group is the holding company of LMAX Limited and LMAX Broker Limited.
LMAX Exchange is a trading name of LMAX Limited, which operates a multilateral trading facility, authorised and regulated by the Financial Conduct Authority (firm reference number 509778) and is a company registered in England and Wales (number 6505809).
LMAX Global is a trading name of LMAX Broker Limited which is authorised and regulated by the Financial Conduct Authority (firm reference number 783200) and is a company registered in England and Wales (number 10819525).