XTX Markets, a non-bank FX liquidity provider and market maker, has reported its final results for the fiscal year ending on December 31, 2020, showing a successful corporate earning season.
According to its latest filing with the City’s register, XTX enjoyed a healthy revenue boost last year to over £651 million, up 92 percent year-over-year from £339 million set back in 2019. The firm said the solid growth in its proceeds – which spans across various asset classes including foreign-exchange, stocks and US Treasuries – was primarily driven by internal trading model improvements and favourable market conditions.
“The overall record was driven by a surge in volumes from XTX Markets, which overtook Citadel Securities and Tower Research Capital to become the largest European ELP SI,” the company said.
XTX, which handles more than $250 billion in trades every day, mainly employs mathematical models trained on huge data sets to connect buyers and sellers.
As for its operational costs, the company’s aggressive plans for expansion at home and abroad saw its administrative expenses nearly triple to £441 million from £142 million the previous year.
Explaining this significant rise, the company said it was expected and came in line with the group re-organisation during the year. It added that its directors consider these costs fairly appropriate given the levels of business activity with costs predominantly driven by the service fees paid to a related entity, technology infrastructure costs, market data and variable compensation costs.
“All staff employment contracts of the Company as well as the ownership of intellectual property were moved to XTX Markets Technologies Limited. This led to a proportionate increase in the administrative expenses of the Company during 2020 in-line with where economic value is generated,” the company further explains.
In terms of its operating income, the automated trading firm put together a strong year-over-year performance relative to a year earlier, having yielded a profit of £150 million compared to £138 million for the twelve months ending December 2019.
XTX Markets has steadily climbed the ranks of electronic market makers, now commanding a significant portion of the spot FX turnover, displacing leading banks such as J.P. Morgan Chase in the process.
Further, XTX Markets was the largest electronic spot FX liquidity provider globally for the second year and was also the largest European equities liquidity provider in 2020 as it continues to build out a growing client franchise.