XTX Markets Ltd. has emerged as a foreign-exchange powerhouse, relying on programmers and mathematicians to fuel its rise into the global top five earlier this year. Now, after becoming a formidable player in currencies, XTX has its sights set on growing in stocks, commodities and bond markets.
But in a world where the difference between profit and loss can be tiny fractions of a second, XTX says it relies more on smarts than speed. Instead of building microwave networks to ferret out prices a microsecond before anyone else, XTX uses mathematical models that are tuned with massive data sets. It says its technology has computing power comparable to some of the world’s top supercomputers.
XTX’s rise comes amid a market shift: In an arms race where just about anyone can lease ultra-fast trading systems, it’s harder than ever to get an advantage simply by being fast. That may have opened up an opportunity for firms with sophisticated statistical models, says Greenwich Associates. As XTX co-chief Zar Amrolia sees it, a key trial for the London-based firm comes when it competes in even more markets that are dominated by high-frequency traders, particularly in the U.S.
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