The plan for London FX firm to become world's biggest stock market has some holes in it

Author: Adam Button | Category: News

XTX Markets is making some bold claims

You have probably made a trade with XTX Markets.

The company made headlines last year is a climbed the ranking of the biggest spot currency traders. It's now the fourth biggest and accounts for about 7.6% of the volume in the market.

What's notable about the company is that it's tiny and has no human traders and only 78 employees. The company says it relies on quantitative research, machine learning and correlations between assets to generate prices.

Lots of buzz words there.

What's worrisome is that as you look closer, the company sounds less like a market maker and more like a quant fund itself.

"XTX uses technology to forecast where prices for securities will be in a matter of minutes or hours," Bloomberg reports today.

That doesn't sound like the kind of thing I want my broker doing. What's puzzling is why they're even in the market-making business altogether. If they can successful forecast where prices will be in minutes or hours, then they pretty much have a licence to print money.