XTX Markets is aiming at a new asset class with the launch of a US-headquartered operation aiming to disrupt market making in US shares. The non-bank foreign exchange liquidity provider has been actively growing its role in the foreign exchange space in recent years. The company is using a quantitative model which in contrast to high-frequency shops is not focusing on speed, but rather on quality.
Former BATS senior executive Eric Swanson is joining the firm as CEO of XTX Markets Americas. He has vast experience in his previous position, where he spent 10 years at a company which is one of the great success stories when it comes to disrupting the stock market.
“Fragmentation of liquidity remains a challenge for everyone but we feel we are up to that challenge,” Swanson commented in a statement provided to Finance Magnates by the company.
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Two years after XTX Markets stormed into the foreign exchange market, it blasted into the top 10 of liquidity providers, joining the ranks of HSBC, Morgan Stanley and Goldman Sachs.
Commenting on the new venture, the Co-CEO of XTX Markets, Zar Amrelia, said: “We have a quantitative model which has proved successful in other markets so expanding this to U.S equities was a natural next step.”
The company’s quantitative model is vastly different from similar offerings in the industry. The firm is using a ‘smart rather than fast’ approach and is holding positions in the FX markets for an average of 20 minutes. This approach contrasts to other companies using a purely mathematical automated trading model, where speed is the key advantage that the shops possess.
The $27 trillion US stock market is a vast challenge for the company, due to the different structure of the market. The firm appears to be fully up to the challenge with a piece by Bloomberg quoting Mr Swanson: “XTX can go from having a toehold, to being a more significant player in the US.”