LMAX also set to launch an institutional trading venue with ‘no last look’, aimed at high frequency traders.

In a recent interview with LMAX CEO David Mercer posted on the LMAX website, LMAX reported some very interesting developments in its business. On the volume side of things — the lifeblood of any forex broker, retail or institutional — LMAX reported that its monthly trading volumes came in at about $125 billion per month in May and June, representing growth of about 5x from volumes in Q2 last year, when LMAX did about $25 billion per month.

LMAX reported that its volumes diversified away from retail forex brokers. Retail brokers represented about 50% of LMAX’s volumes at the beginning of 2013, but now that sits at just around 25% of volume.

LMAX’s interbank trading venue, launched earlier this year, is doing about $600 million per day ($12 billion per month) in volume, and growing. And parallel to the interbank venue, LMAX is preparing for the launch of a new institutional trading venue, open mainly to accredited institutional and high frequency traders, who can trade directly with each other. If you recall, LMAX has its roots in the technology of Betfair, LMAX’s former majority owner and the leader in peer-to-peer gambling. The idea didn’t work so well when LMAX first launched with the retail-to-retail crowd in the forex world, but it does seem to be gaining traction among the bank and institutional crowds.

One more thought — LMAX management, led by David Mercer and financial backer Ed Wray, the former Betfair Chairman, seem to have timed their management buyout of LMAX from Betfair amazingly well. The management buyout was done back in December, at a valuation of just £3.6 million (about $5.5 million) — just as the forex world was about to come out of two years of volume slowdown, into a period of rapid expansion, with our LeapRate Retail FX Volume Index hitting an all-time high in June. Management at LMAX seem to be doing a great job, but again, great timing.

For the complete David Mercer interview on the LMAX website click here.

For more on the global Forex industry see the LeapRate-Dow Jones Forex Industry Report.