The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Market making: Winners and losers in the FX spread war

Spot FX prices are so tight that it is almost impossible to make a profit from market making. Some providers are going to struggle to remain profitable, which might not be a bad thing.

The move by Barclays Capital to introduce what it termed “precision pricing” on its eFX platform last April might prove the initial catalyst that will lead to many smaller players being squeezed out of the market. On the other hand, it might prove little more than a slick piece of marketing that will ultimately have little impact.

Ostensibly, Barclays’ decision to quote less than a tick in, by FX standards, small amounts for various currencies, has almost completely eroded the bid-offer spread. As spot FX market makers do not typically charge commission to their clients for prices, it seems that the only way to continue making money is either to have traders with the ability to warehouse and manage risk efficiently, or to have a smart engine doing the quoting.

This is a point Jason Henderson, global head of FX derivatives and precious metals at RBC Capital Markets, highlights: “I think the interesting thing is not the spread. It’s long been noticed that there’s no spread in standard amounts – the users of the market are getting very cheap execution. You need to find other ways of making money when execution fees are so low.”

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree