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Updated Story: Lucid Markets Shuts Down

Multiple industry sources tell Profit & Loss that Lucid Markets has sent out a communication to all clients stating it is closing its business effective immediately.

The firm, which is majority owned by FXCM, which holds a 50.1% stake through its UK arm, is a electronic market maker in FX.

Although there is surprise at the suddenness of the announcement and the immediate closure, Lucid has been, according to its latest filing in mid-2017, “actively marketed for sale” by FXCM as the latter continues to divest itself of assets following its rescue by Leucadia in early 2015. The firm also reported a loss of over $70 million in financial year 2016, according to the same regulatory filing, although this was entirely related to the firm amortising its Lucid’s goodwill relating to FXCM and was in no way related to trading losses.

Lucid claims to be the first FX non-bank market maker in its marketing material, having been formed in 2009, and its apparent closure highlights the competitive nature of not only that segment, but FX market making in general.

FXCM paid the equivalent of $176 million for Lucid in 2012, in the year to December 31 2011, Lucid reported revenues of $148.9 million and earnings before interest, taxes, depreciation and amortisation of $113.4 million. Later in 2012, the firm was at the centre of a controversy when it was reported that it had multiple connections to Reuters Matching in breach of that firm’s rules. Lucid was, to the displeasure of some of its rivals, only barred from the platform for a short period over the Christmas and New Year break.

In its investor presentation, FXCM said of Lucid, “in the last 33 months they have had only four negative days” and the “largest daily loss was $70K”.

Lucid Markets has been approached for comment and no information is available on the likely fate of its staff.

Colin Lambert

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