Lucid Markets, an electronic trading firm, released its financial reports for the last fiscal year this Friday. The firm, which is majority-owned by FXCM, reported a small profit in 2017 after bleeding cash for the past several years.

Today’s report also noted that the firm will be ceasing its operations in the near future. The company had stated this in a strategic report in January of this year and today stated it is in the process of selling its Exchange memberships.

It is perhaps as a result of this winding down of operations that the firm did not report losses. Today’s report shows that in 2017, the firm had a turnover of $18.75 million. This was down on the previous year when the figure was $26.34 million.

Sales costs up, profits up

The firm’s cost of sales went up last year, increasing to $14.19 million. This was an approximately 4 percent increase on last year when the firm’s sales costs were $13.67 million.

How then was the firm unable to make a profit in the last few years? The answer is that administrative costs went down substantially. In 2016 they were equal to $67.60 million, and in 2017 that figure dropped to $2.65 million - a nearly 96 percent reduction.

How the firm managed to do this is unclear. The vast administrative expenses paid over the past several years may have been a result of some sort of clever accounting trick, or it could mean, more simply, that the firm was a loss-making one.

The fact that the company is closing down suggests that the latter option is the more likely. The fact that FXCM has been trying to sell Lucid Markets since 2015 but has been unsuccessful in doing so would also support the notion that the business hasn't been doing well.

Lucid Markets loss-making stature is a recent one. When FXCM bought the company in 2011, it had been performing extremely well and made decent levels of profit.