What's happened to LMax's spreads?

AARasheed

Member
58 1
Has anyone noticed LMax's spreads have moved from 0.2 on EURUSD to an average of 0.7 (up to 0.9)?

I wonder if they realised their so called unique model is flawed and was losing them money?

What do you guys think?
 

Shakone

Senior member
2,458 665
Well average spread is around 0.6 on EURUSD. Currently it is fluctuating around that, which is at lunch time and in June, so not too shabby.

But in terms of the business I think you have a point. Their costs are pretty high, and although trading volume has been going up (last time I read), it probably isn't enough.
 

AARasheed

Member
58 1
Well average spread is around 0.6 on EURUSD. Currently it is fluctuating around that, which is at lunch time and in June, so not too shabby.

But in terms of the business I think you have a point. Their costs are pretty high, and although trading volume has been going up (last time I read), it probably isn't enough.

I was getting an average of 0.3 on EURUSD at that time (via Currenex).

I agree, I think they must have cut spreads so much to get the business in and were running at a loss.
Also I heard they burned through a massive amount of marketing cash and have a large desk of Sales people too (not cheap guys either). I won't be surprised if spreads are widened here on so the company can start making money.
Correct me if I am wrong.
 

Shakone

Senior member
2,458 665
I was getting an average of 0.3 on EURUSD at that time (via Currenex).

I agree, I think they must have cut spreads so much to get the business in and were running at a loss.
Also I heard they burned through a massive amount of marketing cash and have a large desk of Sales people too (not cheap guys either). I won't be surprised if spreads are widened here on so the company can start making money.
Correct me if I am wrong.

Well they can't really artifically widen spreads. That's not how it is set up as I understand it. They could increase commissions of course and rollover charges, but they can't go too far or that will be counterproductive.

I don't know what they'll do. Essentially they need to cut their own costs, and dramatically increase volume. I don't know how far they've got on either, as I haven't heard much on it since about 6 months ago. Aside from forex, their offering is weak. Spreads on indices are twice what is competitive. Commodities are not great either.
 
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Liquid validity

0 0
Has anyone noticed LMax's spreads have moved from 0.2 on EURUSD to an average of 0.7 (up to 0.9)?

I wonder if they realised their so called unique model is flawed and was losing them money?

What do you guys think?

????
Just looked now (1830 gmt) EURUSD spread 0.3 / 0.4 consistently.
Does blip to 0.6 now and again, maybe someone gaming the bid ask spread, posting and pulling limits...
LMAX Exchange | The first MTF for FX Trading regulated by the FCA

What time of day did you see 0.7-0.9?
Was it around news, that may explain it.
Definitely EURUSD as well?

EDIT - yeah, just seen same fleeting price on bid ask, someone is working it...
No big deal.
 

AARasheed

Member
58 1
????
Just looked now (1830 gmt) EURUSD spread 0.3 / 0.4 consistently.
Does blip to 0.6 now and again, maybe someone gaming the bid ask spread, posting and pulling limits...
LMAX Exchange | The first MTF for FX Trading regulated by the FCA

What time of day did you see 0.7-0.9?
Was it around news, that may explain it.
Definitely EURUSD as well?

EDIT - yeah, just seen same fleeting price on bid ask, someone is working it...
No big deal.

I checked several times in the morning, afternoon, etc. Non news times.
Since Monday this week, I've been monitoring.
Yes
 

C-12

Junior member
22 0
I am slightly concerned about the rising spreads trend with LMAX, specifically GBPUSD.

Used to be rock solid under 0.8-0.9 previously but was hovering consistently over 1.3 for parts of last week.

I know this sounds a minor issue but it is a fairly big deal for an M1 sniper. :)
 

TraderHoo

Junior member
11 0
Yep I can confirm this. LMAX spreads have become much bigger than just a few weeks/months ago. AUDCAD is just flat out un-tradeable most of the day.
 

C-12

Junior member
22 0
Spreads are much better today. EU hovering between 0.2 and 0.3 and GU mostly between 0.6 and 1.0 (y)
 
C

cablemonster

0 0
yup to me it looks as if the spreads have widened out. they are clearly taking a cut somewhere. But it is an ECN I hear you cry, here is how it works in the real world. LMAX will have arrangements with a number of liquidity providers (the usual suspects), these LPs were getting good flow and LMAX were showing very tight spreads. Now LMAX want more cash so they approach a few of the key LPs and say look guys with the liquidity you are providing here we are able to offer crazy tight spreads, why dont you widen out a bit and give us a kickback, and of course you get to wet your beak also. this is what I think is happening here. just goes to show you even with a true ECN they will find ways to get you. forex is about shades of grey.

of course the other explanation is that LP's have pulled away from LMAX but I dont buy this as I am sure they want the flow through this channel.

edit - take a look at their own historical spreads chart for cable (blue line) it has risen from around 1.0 to 2.0 in 3 months.:D not good.
 

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bootsyjam

Active member
228 21
yup to me it looks as if the spreads have widened out. they are clearly taking a cut somewhere. But it is an ECN I hear you cry, here is how it works in the real world. LMAX will have arrangements with a number of liquidity providers (the usual suspects), these LPs were getting good flow and LMAX were showing very tight spreads. Now LMAX want more cash so they approach a few of the key LPs and say look guys with the liquidity you are providing here we are able to offer crazy tight spreads, why dont you widen out a bit and give us a kickback, and of course you get to wet your beak also. this is what I think is happening here. just goes to show you even with a true ECN they will find ways to get you. forex is about shades of grey.

of course the other explanation is that LP's have pulled away from LMAX but I dont buy this as I am sure they want the flow through this channel.



edit - take a look at their own historical spreads chart for cable (blue line) it has risen from around 1.0 to 2.0 in 3 months.:D not good.


Aha I emailed them qabout this last week as was noticing it most on gbusd. Don't mind wide spreads for less liquid pairs but to have an increasing spread combined with commission? All of a sudden it isn't looking so hot is it
 

C-12

Junior member
22 0
Aha I emailed them qabout this last week as was noticing it most on gbusd. Don't mind wide spreads for less liquid pairs but to have an increasing spread combined with commission? All of a sudden it isn't looking so hot is it
I'm with you on this. 1.5 - 2.0 pips is pretty standard on GU so 1.3 plus comms isn't that attractive considering. If they can bring spreads back consistently under 1.0 I'll be happy with em.
 

TraderHoo

Junior member
11 0
Aha I emailed them qabout this last week as was noticing it most on gbusd. Don't mind wide spreads for less liquid pairs but to have an increasing spread combined with commission? All of a sudden it isn't looking so hot is it


I wrote to them too a couple of weeks ago and the account manager gave me some bull**** about the best execution in the market and how LMAX was worth it. I told him if spreads don't improve I will move my business elsewhere. He said he would forward my feedback to London HQ.

The awful spreads are as bad as the Metatrader commission free shops. Why the hell would anyone pay top $$ commission and then also pay a huge spread?
 

Shakone

Senior member
2,458 665
LMAX Interbank may have had an effect. Also LMAX are looking to get into the US, so retail is probably of less and less importance. Not sure if they've succeeded with the interbank and what kind of volume they get there, or if they will succeed in the US.
 
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cablemonster

0 0
I wrote to them too a couple of weeks ago and the account manager gave me some bull**** about the best execution in the market and how LMAX was worth it. I told him if spreads don't improve I will move my business elsewhere. He said he would forward my feedback to London HQ.

The awful spreads are as bad as the Metatrader commission free shops. Why the hell would anyone pay top $$ commission and then also pay a huge spread?

well quite. if you have got a 100 large there are better options out there. for example hotspot (see screenshot) 0.7 pip spread on cable showing better still an aggregator like Integral where you will get consistently below 0.5 pips on cable if you are not trading size - screenshot here is inverted but normally around 0.5 pips or less if you are clipping 5m or less.
 

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