After Grabbing FX Market Share, XTX Looks To Expand Its Electronic Empire

The biggest traders in foreign exchange gathered last May in a converted Victorian bathhouse in London.

- Lananh Nguyen

They drank Champagne amid ornate tile mosaics, stained glass, and Oriental rugs. The results of the 2018 Foreign-Exchange Survey by Euromoney Institutional Investor Plc were being announced.

A gasp and clapping echoed through the room.

XTX Markets, a three-year-old startup, had been named the third-largest market maker in the $5.1 trillion-a-day market, leapfrogging some of the world’s biggest banks including Citigroup Inc. and Deutsche Bank AG. For a company that ranked 12th the previous year, it was a coup.

NOW THE LONDON-BASED COMPANY, which doesn’t have any human traders, is setting its sights on U.S. markets.

XTX aims to expand in stocks and Treasuries, markets in which it says customers aren’t getting a good deal. “We don’t believe that all markets are fair and efficient,” says Zar Amrolia, XTX’s co-chief executive officer. He points to U.S. equities in particular. “The speed is so high, it’s really providing no benefit to the market at all—it’s detrimental,” he says, adding that it raises costs for investors. Amrolia, who has a doctorate in mathematics from Oxford University, was co-head of fixed income, currencies, and commodities at Deutsche Bank AG before leaving in 2015 and starting XTX with fellow Deutsche Bank alumnus Alex Gerko, who also has a Ph.D. in math.