Seven (Largely FX) Observations on the 2026 JP Morgan E-Trading Edit

The tenth annual J.P. Morgan E-Trading Edit has been published, you can access the findings here, providing insight into traders’ thoughts across asset classes and the world. Colin Lambert took a look at the data and provides some observations on this year’s findings, especially for the FX industry.

Prescient…to a degree

There is no surprise in geopolitical events and the generally volatile international scene ranking highest in traders’ minds in terms of their potential impact on markets, but did they anticipate just how much upheaval global markets were going to go through?

It is nigh on impossible to find a market survey over the past 10-12 months that hasn’t had this as a big issue given the US administration’s approach to international trade relations, but did they see the US directly involved in a conflict in the Middle East? Probably not.

In this year’s Edit, the two highest TradFi markets with this as their number one concern were commodities and FX and precious metals options traders, but neither was over 50% (crypto was!) It is probable that the survey picked up on the surge in volatility in precious metals, rather than energy.

Also, inflation, which was last year’s number one concern in the Edit, dropped the small matter of 38 points to just 13%. This does not sound like a group of respondents expecting an oil shock.

What the Edit did flag, with the benefit of hindsight, was how markets were prepared for something, and that probably is one reason why, while markets have been really busy, we have not seen a major dislocation…yet.

Volatility is a friend?

It is a widely-held belief that uncertainty and volatility are the FX market’s best friends, but that is a broad observation that brushes over several nuances. The Rates spectrum, with central banks seemingly entering into a period of wait-and-see, had less concerns over volatile markets, but FX was not that far behind. With 38% citing it as their biggest daily challenge, FX is underneath the broader average of 43% (FX and precious metals options traders were above at 45% but that is probably down to the gold traders), suggesting there are (relatively) few concerns.

That hides a divide in the market however, and what the Edit has picked up on here is likely the challenge of anyone needing to execute in these conditions. Market makers and LPs in general thrive in such conditions, it’s when the brokerage model comes into its own, but a buy side execution desk? That’s a different story, and highlights the divide that exists in FX and just a few other asset classes.

Put simply, the segment of the market providing a service is seeing a return in investment in its technology and distribution platforms (more on that later), while those that participate for administrative reasons, hedgers to you and I, are faced with their worst nightmare, when a seemingly run-of-the-mill execution can go badly wrong.

So yes, FX does seem to be less concerned over volatile markets, thanks to its different market structure and regulatory treatment at the short end, but it really does depend upon where you sit.

The FX market works

A pattern of recent JP Morgan E-Trading Edits has been while access to liquidity is still a top-three concern – and will ever thus be for traders – it’s less of a worry year-by-year.

Clients are even more comfortable in FX that they can get liquidity when they need it, for while 13% highlight this as a challenge this is the fourth year in which the percentage citing it has fallen.

Liquidity will always be a part of a trader’s angst, there’s always that threat of an “unknown unknown” drying up markets for a brief period of time, but it does seem as though dealers are realising that LPs are maintaining services in the face of seemingly never-ending volatility and events. This inevitably makes them more comfortable.

To put it into perspective, concerns over liquidity have steadily dropped at the same time as geopolitical and economic tensions have ramped up. It’s counter-intuitive but a big tick for the FX market.

How’s that SDP coming along?

Across all asset classes, we should not be surprised that 40% of traders use both single- and multi-dealer platforms – that is just a common-sense technology and market access risk mitigation play. More use MDPs, 36%, than SDPs, 24%, which is a result of past decisions that have embedded them on MDPs and the much easier best execution work involved on these venues.

The Edit also highlights the continuing value of the SDP though, and this has also been a theme for several years now. It could also be flagging up a future trend in data.

Ultimately however, the SDP remains all about liquidity and execution costs. Given a lot of respondents are likely on MDPs as clients, and therefore not paying brokerage, I suspect the 23% that cited this alongside reduced execution costs are largely thinking the latter (or are lower tier LPs that pay on MDPs but are treated as a client by the Tier 1s).

Access to liquidity on an SDP, and inventory, rank alongside execution and brokerage costs (all at 23%), which tells us that traders continue to wake up to the hidden cost of market impact and information leakage. There are those that like to talk about so-called “hidden costs” in the spread, the reality is the most overlooked “cost” is poor execution standards.

What this year’s Edit reinforces is that smart traders want to go to a good internaliser who doesn’t signal their interest. Traders can often get a tighter price in their size and pricing is rarely offline even in the most extreme circumstances. It’s a reliability and “liquidity of last resort” thing.

Also notable, however, was the continued popularity of “advanced analytics”. Again, the big internalisers are probably sitting on more valuable data than what a bunch of non-bank “LPs” are, and this makes the data packages valuable. Real-time data access was also cited as a big reason to go to an SDP – hence why banks need to be investing in their SDP and using it as a shop window.

JPM is a good example of a bank that knew it had to improve its pricing and put the work and dollars in, which it did over a decade ago, but then realised it also needed a state-of-the-art analytics package and a better shop window. The result of the work that went with it has been an FX business widely regarded as the best in the banking world for several years now. The good news for clients is other banks are working on their SDPs, which will inevitably bring more choice and more innovation.

One final thought on data. The cost of data is clearly pushing some participants in the SDP direction, but many expect blockchain technology and AI to disrupt the data landscape. If it does, it will hit the SDPs last – that may be a factor down the road in where people trade.

Is the buy side starting to invest in its tech?

First an observation on how quickly things can change. In the 2025 Edit, tech innovation’s likelihood of having the greatest impact on markets simply didn’t register with respondents. Roll forward 12 months and one AI-inspired panic, and it is now ranks second, albeit down at 19%, but that is probably due to the swarm of people worrying about volatility.

Workflow efficiency was also lower as a challenge, but again, this could be the result of everyone looking at the price action. It could also, however, highlight how, gradually, the buy side is adopting the solutions available to them (and they are many) and actually doing some of the required technology lift to improve their workflow. The sell side has been on an efficiency drive for several years (decades!) now, so any improvements are likely to have come on the buy side.

As a challenge, workflow efficiency ranked higher among FX and PM option traders, but this is likely due to those markets lagging their cash equivalents. They could also be looking, with some envy, at the bottom-line benefits greater automation has bought to the cash markets and wanting the same.

On a side note, the broader Rates spectrum seems least concerned about developments in market technology – read into that what you will – but surely in the prevailing FICC model, this will change soon?

In reality the broader concerns about market technology development are likely to be centred on AI, because nothing else really stands out as a market structure development that is anything but evolutionary. AI seems revolutionary (finally!) so could be triggering concerns. Should it though? Maybe some should be concerned, for their jobs mainly, but I still see AI as an enabler in FX, rather than a destroyer.

One final thought on this that also may be signalling more tech investment on the buy side. For the first time in a while, the Edit finds more people planning to trade FX electronically. This measure has been in the mid 60s in recent Edits, this year it has, comparatively speaking, leapt, although with a caveat. At 68% expecting to do more e-trading in FX in 2026, the needle isn’t moving that far, when it comes to 2027, that jumps to 77% – another sign of work starting?

A return to an old argument in crypto

Many, many, (many) years ago, I recall we went through a period when the big debate in those circles that cared was whether the crypto revolution was about the currency or the technology. My view has always been the same, cryptocurrencies are something to trade, the real impact will come from the technology.

Well, it’s been a while, but the last six months have seen crypto prices plummet, and interest in the technology soar – the great divide is on maybe and a winner can be declared?

In this year’s Edit, crypto and digital asset traders had the highest concern over volatile markets at 57%. Aside from the thought that you’d think they’d be used to it by now, this could be a signal the market is maturing. That and the persistent need to attract real real money, which will continue to be scared off by the small matter of a 40%-plus drop in values.

A high degree of nervousness about values, therefore, was balanced by tokenisation (on the sell-side) and stablecoins (on the buy side) overtaking crypto as the biggest opportunity in digital assets. This could be a factor of the current cycle in markets, which do love a bandwagon to jump on after all, but it more likely signals the industry’s acknowledgement that here, there are technology developments that could bring real efficiency to all and sundry.

Crypto is still seen as an opportunity, of course, just by not as many as the technology is, and that is as it should be in any survey of traders. The fact that more of this group is keenly interested in the tech, however, is notable, for history is littered with instances of traders’ “ho-hum” reaction to innovative tech!

It’s too early to call the demise of cryptocurrencies – and it still costs a relative arm and a leg to buy one bitcoin – but perhaps we will look back at 2025/26 and see the time when the TradFi world truly embraced the tech, if not the currencies.

Plus ça change

For an industry that likes to pride itself on innovation, one of the key themes of this and recent Edits has been one of evolution rather than revolution – and that holds true in this year’s edition. Yes, the impact of AI may have blind-sided people, but last time I checked its impact was incremental, and not the complete and immediate takeover some parties will have us believe.

From an FX perspective, the Edit paints an important picture, one in which innovation is at the edges, but carefully thought out within a broader, stable (and robust) framework.

The day we have a survey of traders that does not mention access to liquidity as a major factor I will question the species’ existence – the same goes for market depth.

What was interesting in the Edit was a little geographical nuance that JP Morgan threw in, that APAC traders are the most enthusiastic about generative AI being the most influential development over the next three years, while their North American counterparts were more balanced, seeing it as important, but not much more than workflow technology integration, EMS work in particular.

Bonus Thought: Something else which has largely been dismissed for the short-term and coming to impact an industry near you soon – quantum computing?

Bonus idea: This survey remains one of the more authoritative published given it’s aimed at the front line, but it would be a great follow up – and maintain interest and momentum behind the Edit – if there could be smaller follow up reports with a little more granularity on the major asset classes (OK, just FX!)