LMAX Pushes Forward with InterBank Venue?

The world's first FX orientated financial trading exchange, LMAX, aka London Multi Asset Exchange, has re-branded its website. The firm has shifted away from its initial ‘red’ colours and moved to a more dark blue, a colour that is commonly used by exchanges. The firm still offers its product for professional traders who can open an account online, but has promoted the LMAX InterBank product as one of its core offerings, alongside its LMAX institutional offering.

LMAX launched in 2010, as the first FX MTF, and since its inception, the firm has gone a long way in terms of positioning and structuring itself as a venue of choice. In the early days, LMAX was competing in the retail space where it provided an alternative ‘exchange based model’, whereby traders would be exempt from common issues such as re-quotes, Slippage and the old age taboo topic of b-book trading. The new interbank model uses the LMAX technology, a low latency matching engine that routes orders direct to the main market.

The new LMAX website classifies its three core products, and now colour codes them to avoid any confusion. LMAX Professional which targets money managers, broker dealers, MT4/5 brokers and professional traders, according to its website. The design team has chosen purple as the colour for LMAX Professional, thus signifying royalty or nobility. After the professional product is LMAX Institutional, which comes in a fine green and commonly symbolises growth and harmony, the target market being, hedge funds, high-frequency traders, corporates and CTAs. Last but not least, LMAX InterBank, where LMAX is using the mighty blue which signifies depth, stability and intelligence, as per the firm’s website that this is an exclusive trading venue, “LMAX InterBank is a spot FX execution venue for banks only, part of LMAX Exchange.”

In 2012, we saw a proliferation of new ECNs that entered the already congested inter-bank market place. LMAX is looking to compete with players who have proven infrastructure and capabilities since the start of electronic trading in the FX markets, however, the firm is adamant that its technology is the key.

The firm's CEO, David Mercer, spoke about the growth it has been experiencing in an interview with Profit and Loss last month: “In May and June (2013) we did about $125 billion each month. Across eight quarters we have compound 85% growth – we did about $74 yards in the second quarter last year, and will do something like $340 yards this quarter.”

The most liquid inter-dealer players e.g. EBS and Reuters, are averaging plus $100 billion a day in trading volumes. They were joined by FXall who has crossed the formidable century mark. It will be interesting to see how the technology is welcomed by the banks who have been there and traded that.

Forex Magnates still awaits the company's comment on the matter.