The "Morning Run" and the Evolution of FX Trading

Sometimes the simplest technology is the best!

Ever get a "morning run" from a voice broker? If you're under 40, probably not. But back in the day, that's how FX worked. Every morning, the day would kick off through 10 different "broker boxes."

"Chris, want a run through?” “Let’s Go” "Cable range 35/55 in Asia, better bid early London…"

All day long, you'd hear blurts: “20/25 small top.” Then came the lunchtime lull, where eating was optional. By mid-afternoon, prices would suddenly morph into blurred-phrases: “50/55 small by tiny… 50/55 smell my heinie.” This, my friends, was Gen X market data.

And after work… well, those shenanigans aren't for here. Suffice it to say, I'm not sure today's generation is cut out for that kind of bodily abuse.

Then Everything Changed

Electronic trading. Suddenly, we had screens with real-time prices that we could execute through. The primary venues became the source of truth. No more waiting for telex spit-outs. Pricing was instant, electronic, and centralized.

The numbers tell the story: Electronic trading exploded from 2% in '93 to 20% by 2001.

Then Came The Next Evolution: Non-Bank Market-Makers

Non-bank Market-Makers entered the scene through newly created Prime Broker businesses. Instead of traders pounding on keypads, API access became a reality. Every venue tripped over themselves to onboard as many of these High-Frequency Trading (HFT) firms as they could. They became the largest and most active customers on most venues, so how could they be ignored?

But as we know, all markets strive for efficiency. So banks started thinking: "Wait a minute. Why are we being forced to cross bid/offer spreads? We've got this price data. We've got these client relationships. Why are we sending everyone to trade somewhere else?"

By 2009, Single Dealer Platforms (SDPs) were handling ~25% of FX flow. Today, it’s ~90%. This wasn't because banks forced clients to trade bilaterally, but because clients preferred it.

Why?

• Tighter/more tailored pricing

• Less market impact

• The ability to internalize flow

• Stronger client relationships

The primary venues didn’t pack it in. They created new modalities, moved into new asset classes like Non-Deliverable Forwards (NDFs). And guess what? When "shit hits the fan" and the Swiss National Bank (SNB) decides to pull the chord on EUR/CHF, the primary venues become all the rage.

ENTER CRYPTO

It's like watching FX rewind in slow motion. Institutions say they want market efficiency. So why are we still building walled gardens and watching as:

• Exchanges act as custodians, forcing capital to stay locked.

• Custodians act as exchanges, controlling flow instead of enabling it.

• Trading firms are resigned to inefficiency, thinking "this is just how it works.”

This isn’t innovation. It’s just repackaging old inefficiencies into a new asset class. We’ve seen this story before. FX proved that liquidity finds a way. Traders will always prioritize execution quality, efficiency, and liquidity.

The Market Structure Evolution is Inevitable:

• Primary venues will evolve beyond simple matching engines.

• Over-The-Counter (OTC) trading will grow, and the winners will be those who enable the evolution, not fight it.

• OTC trading isn't coming, it's happening and growing.

The only question is: who's ready for it... and who gets left behind?