LMAX Exchange Posts Record Growth for 2017 as Gross Profit Hits £25m

LMAX Exchange has just reported on the outcome of 2017 for the company. The firm posted multiple records last year as institutional clients demand continued to drive trading volumes higher.

Annual volumes from the institutional clients of LMAX Exchange increased 58 percent year-on-year, reflecting an increased number of clients globally. The company posted an EBITDA of 8.8 million pounds ($12 million), a figure which is higher by 58 percent when compared to a year ago.

LMAX Exchange’s gross profit for the year was 25.4 million pounds ($34.4 million), up 22 percent year-on-year. The firm posted massive gains across its facilities in New York and Tokyo. Trades executed via the NY4 matching engine increased fivefold when compared to the previous year, while activity on the TY3 location spiked threefold.

Solid Metrics in Recent Years

Two-year (2015-2017) annually compounded growth results demonstrate EBITDA growth of 151 percent annually, gross profit at about 28 percent annually and notional volumes at about 20 percent annually.

Commenting on the company’s results the CEO of LMAX Exchange, David Mercer, said: “Our results demonstrate the increasing appeal of order-driven firm Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term for trading institutions and the growing focus on precision and certainty of execution. LMAX Exchange has built a leading institutional exchange for FX trading and we are proud to count over 300 large funds and brokers in our global institutional client base, and all major global banks and non-banks among our 25 Liquidity Providers Liquidity Providers A liquidity provider (LP) constitutes an individual and/or an institution that functions as a market maker in a given asset class. Broadly speaking, liquidity providers will act as both the buyer and seller of a particular asset, thus making a market. In the equities space, many stock exchanges rely on liquidity providers who make the commitment to provide liquidity in a given equity. These liquidity providers commit to providing liquidity in the hopes that they will be able to make a profit on A liquidity provider (LP) constitutes an individual and/or an institution that functions as a market maker in a given asset class. Broadly speaking, liquidity providers will act as both the buyer and seller of a particular asset, thus making a market. In the equities space, many stock exchanges rely on liquidity providers who make the commitment to provide liquidity in a given equity. These liquidity providers commit to providing liquidity in the hopes that they will be able to make a profit on Read this Term.”

“As an established, independent business, gaining significant traction year on year, we are in an exceptionally good position to drive further growth in client funds and trading volumes. We will continue to fulfill our ambition of capturing a larger share of the institutional market as we propagate the exchange model globally,” Mercer elaborated.

2017 Recap

Last year LMAX Exchange opened an institutional sales hub in Singapore and strengthened its sales coverage with multiple senior appointments in the Asia Pacific and North America regions. LMAX Exchange now has offices in London, New York, Chicago, Hong Kong, Singapore, Tokyo and Auckland and matching engines in all major FX centers.

Regulatory compliance: A significant project for LMAX Exchange in 2017 was the separation of its brokerage business into a newly FCA regulated entity, LMAX Global, to comply with MiFID II. This was completed successfully in December 2017.

David Mercer commented: “The Company expects strong revenue growth to continue and its market share to increase further in 2018. We are witnessing continued focus on governance and regulatory changes driving more FX trading onto regulated exchanges like LMAX Exchange. These developments are commensurate with the Company’s vision of transforming global FX trading into a fairer and more transparent market place.”

LMAX Exchange strongly committed to the FX Global Code of Conduct and has welcomed its intention to restore trust in the FX industry. The firm continued to campaign for the next iterations of the code to take a stricter stance regarding the practice of ‘last look’ and pre-hedging during the ‘last look’ window.