The Forgotten FX Market
Change is inevitable – and at present, the foreign exchange landscape is ripe for it.

This article was written by Mitch Eaglstein, founder and CEO of FDC.
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Claiming an aversion to risk, several major banks have all but abandoned a large portion of the FX market. After experiencing heavy losses during the 2008 global financial crisis, major banks grew more cautious of FX prime brokerages, paving the way for a new prime of prime market where smaller financial firms act as prime brokers for companies with $1 million to $20 million in net capital.
Following the 2015 Swiss National Bank removal of the 1.20 peg to the euro, banks experienced heavy losses which caused more prime brokers to raise their requirements to the extent that many wouldn’t consider firms with less than $50 million in company capital.
Prime brokerage services are now positioned to provide tangible benefits to FX firms and fill the void. Among the more obvious benefits of a prime brokerage is the access to liquidity they afford, allowing firms to receive interbank and ECN liquidity and benefit from the economies of scale.
Furthermore, prime brokerages drive lower trading costs: historically, in the FX market, firms would utilize multiple liquidity providers (LPs). If a client opened an account at two LPs and aggregated their feed, they would often end up with a long position at one LP and a short position at the other LP. Depending on where the market moves, one LP account will make money and the other will invariably lose.
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Balance this exposure necessitates closing out the position at the account losing money, and re-opening the position at the profitable account. When the broker performs this action without utilizing a prime broker, it typically pays the spread, which can be quite expensive – for example, a one pip spread to balance out LP accounts on a 100 million EUR/USD position will cost a firm $10,000.
Clearing the trades through a prime broker, however, allows the smaller broker to bypass the challenges of balancing accounts at various LPs and subsequently to avoid extra costs. Additionally, while reducing the explicit trading costs, the prime broker allows the client to reap the benefit of LP aggregation.
A prime broker subsequently becomes the ultimate counterparty to each of the client’s trades, regardless of which LP receives them. If one of the LPs defaults on a trade than the prime broker must take responsibility and come to an amicable resolution with the customer. As the larger balance sheet players such as major banks have left or reduced exposure to the market, retail brokerages are entering the prime broker space using technology to maintain a competitive advantage and to provide significant value to their customers.
Change is inevitable – and at present, the foreign exchange landscape is ripe for it.
Mitch, please take my friendly advise ( it is free ) : STAY AWAY from FX Industry. Move on!
bloody hell! give me a break. get this guy’s face out of here. he better give the money he pocketed back from Fortress . what can he know about prime brokerage?
I think it is disgusting that while people are still trying to get their money back from the brokerage he ran he is on here promoting his next venture like nothing happened. Isn’t that 3 companies Mitch has been involved in that have ended in failure. Anyone that deals with him clearly has no integrity and if I learn of my broker using his firms services I will close my account.
In order for retail to fully embrace FX market, they will have to exist 24/5 and not run away (close-only mode) when a little volatility comes their way.
Firstly what is this article saying that is news? It is just saying what has gone before and could have been written by someone in their first week in the industry. Secondly I think it says a lot that Finance Magnates would allow this guy to write on their site after he lost so many people their money. I assume he is paying to put this article here. The best quote I ever heard was from Mitch, ‘I didn’t know the company I worked for wasn’t regulated’, great quote from the CEO.
Shameful to allow swindler to post on beloved Magnates website. Maybe Eaglestein using money stolen from Fortress clients to pay for press coverage of new swindle machine, da?
Note image of smiling idiot in front of framed picture of purported, former backer. Sheik would pour oil down swindler’s throat for tarnishing name of Sheik.
You got them to change the picture. HaHa!
Friday Haiku:
Wishing he stayed gone
But here we see the villain
Where is my money?
Friday Haiku:
“Prime Bro” words float free
Fortress was bucket shop, yes?
Knows not of Prime Bro
mitch
ex fortress prime client
can we have our $ 40 k back you scammed