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LMAX launches weekend FX trading, taking inspiration from crypto market approach

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LMAX Group announced Tuesday that it is launching a new weekend-focused foreign exchange (FX) trading service.

LMAX credited customer demand for the move to launch the weekend service, which will operate from 5:05 p.m. EST Friday until 5:00 p.m. EST on Sunday. This expands the exchange's services beyond its regular operating hours.

LMAX will offer cash-settled contracts for difference (CFDs) during those times. Initial trading pairs include EUR/USD and USD/JPY. The company said that it is looking to add additional trading pairs in the future.

In a statement, LMAX Group CEO David Mercer highlighted how recent months – during which economic uncertainty and a global pandemic triggered an unprecedented shift in how businesses operate – exposed a need for greater accessibility to such markets.

"The last few months have reinforced the common understanding that volatility doesn't stop on a Friday night and risk events have now extended beyond the working week," said Mercer. "As a result, the current trading session doesn't reflect market participants' increasing need to access FX liquidity 24/7 in order to exchange risk – this puts significant pressure on the FX market to move with the times and become fully accessible seven days a week."

The move puts LMAX in a position to grab some of the potential demand for FX trading that might exist outside of normal operating hours. In September 2019, the Bank of International Settlements reported that FX trading volumes hit $6.6 trillion per day in April of that year. It also mirrors the always-open market approach seen in crypto markets today. 

LMAX Digital, LMAX's crypto exchange, first launched in May 2018. As seen in the chart below, reports an average of $101 million and $108 million on Saturdays and Sundays, respectively.

When reached for comment, Mercer told The Block that "[i]t is significant that our major LMAX Exchange FX liquidity providers and participants are also very active on LMAX Digital. It makes total sense that the established asset class learns from the young upstart at this juncture."

"Perpetual trading and open market access are without doubt the future of capital markets. With US elections looming, pandemics booming, stock market bubbles and potential year end Brexit troubles there is no more appropriate time to launch the LMAX weekend FX service," he continued.

In the press statement, Mercer said that the Weekend FX launch is part of a longer-term arc toward a "perpetual trading" approach.

"More broadly we see LMAX Weekend FX as the first step along the path to all asset classes and markets opening up to perpetual trading and transitioning to complete, open market access," he said.

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