The MetaTrader revolution is here! This is how it works
For the first time in the history of electronic trading, MetaQuotes, along with some of Chicago’s most well respectedlisted derivatives, futures and equities brokers and technology providers have worked together to make it possible for retail brokerages to finally up their game. Going live today, all MetaTrader brokers now have a genuine multi-asset future
For many years, FinanceFeeds has advocated the need for retail FX brokerages to cost-effectively elevate their business potential by offering an exchange-traded, multi-asset product range via their existing platforms, be they proprietary or off the shelf systems such as MetaTrader 5.
Astute investors in first tier jurisdictions, which form the client bases that retail brokers should be looking to onboard and retain, may well be conservative and prudent, but they are very technologically analytical and expect to be provided with proprietary trading systems that are developed, supported and continually evolved in the way that only London’s world-leading FinTech sector can provide.
Multi-asset trading environments, offering connectivity to massive asset bases is a pre-requisite in order to engage these good quality traders and investors, who are usually well-read, strategic and pragmatic.
For the last sixteen years, what began as a fledgling entrance into the world of electronic trading by newcomers which hail from a very different background – usually affiliate marketing rather than trading – has morphed into the mainstay of retail electronic trading, however the default spot FX products and b-book modus operandi has become somewhat of a bugbear for many brokerages which now find themselves in a narrow margin orientated rut, unable to find a means of elevating their services to attract a higher quality of client base, and competing with over 1300 almost identical offerings, all doing the same thing.
This, in itself has resulted in low deposit, low gain clients which have been in many cases targeted by the same firms offering similar inflexible products, and is in no way a means of brokers which do not wish, or have the resources to invest in their own infrastructure being able to attract experienced futures or equities traders who would ordinarily have a large portfolio, reside in some of the world’s most advanced financial markets economies and demonstrate great experience rather than be novices having a ‘flutter’ which go away after $200 deposits.
The revolution had to come, and now it is here.
there is now a fully accessible multi-asset solution for retail brokers which allow the trading of spot OTC derivatives on the same platform as multi-asset exchange listed futures and equities.
This not only elevates the potential client base of brokerages, as it accesses the equities and futures traders on exchanges, many of whom reside in first tier regions such as the United States, Singapore, Hong Kong, Australia and Switzerland, but also generates a highly sustainable environment for brokers in which long-term traders with less leverage and larger capital margins operate, bringing them into the realms of the portfolio holders rather than CPA/lead conversion short term business.
Quite simply, it is high time that the entire FX brokerage and OTC retail electronic trading business went multi asset, and by that, we mean properly multi-asset, providing derivatives exchange connectivity and access to futures, equities and stocks on Chicago and New York exchanges, on the same platform as spot FX – namely MetaTrader 5.
The solution, developed by Markets Direct, operates via a B2B integration to the CQG API to stream tradable FX, US equities and Futures prices via MT5, CQG and NetDania platforms.
“The integration of MetaTrader 5 with DriveWealth came to life at the best possible time, when the demand for access to US Cash Equities is truly high. This makes it possible for any broker, bank or hedge fund, through their MetaTrader 5 platform, to offer to their traders and investors the best of both worlds. That is, access to full or fractional shares, as well as futures and other exchange traded instruments, with the minimum complexity and with competitive conditions. Everything is accomplished by utilizing MetaTrader 5 Multi-Asset capabilities and the MetaTrader 5 Gateway to MetaTrader 5, for a Server to Server connection, both through DriveWealth as well as through its qualified intermediary, Markets Direct”- Christoforos Theodoulou, Head of Global Business and Sales, MetaQuotes
It is a 100% turnkey solution, including all of the technology, regulatory compliance, and banking solutions, and has the EU Level 3 license which offers the following unique opportunities to the small and medium broker. A multi-asset solution developed through a combination of unique participants.
For brokers, the most important feature is the Qualified Intermediary (QI) solution that Markets Direct established. Brokers can choose to work with Markets Direct for all asset classes or chooses an a la carte offering. Note, cross-margining across all three asset classes can only be achieved if a broker takes the complete solution from Markets Direct. For FX, brokers can continue to work with their existing LPs or access Markeds Direct’s extensive LP pool.
This is the very first true multi-asset platform with US listed equities and futures, which includes cross margining capability across all assets utilizing a single account (wallet), over 3300 listed equities and ETFs, and a choice of MetaTrader 5, Netdania and CQG platforms, and fractional share trading enabling.
Joe O’Mara, CEO of Markets Direct explained today to FinanceFeeds
“Multi-asset trading is the future for online FX brokerage firms. Companies are looking to be a more complete trading firm for their clients. Adding US listed equities and futures enables clients to build long term wealth with US stocks while empowering them to speculate and/or hedge their portfolios utilizing futures.
Markets Direct now offers a complete turnkey solution for brokers to be able to offer FX, US equities and futures from a single account utilizing a shared wallet. This enables clients to cross margin their holdings to trade across all asset classes giving traders the ability to capitalize on market opportunities across all asset classes!” – Joe O’Mara, CEO, Markets Direct
MetaQuotes is on board, supporting this huge step
For perhaps the first time since its inception, MetaQuotes, the developer of the MetaTrader platform which dominates the retail trading sector amon brokerages that have off the shelf platforms, is actually on board and working closely with Markets Direct and DriveWealth to deliver a full multi-asset solution.
DriveWealth, which is the equities broker that is integrated into the new Markets Direct solution, allows U.S. share trading is available directly in MetaTrader 5 via a sophisticated, server to server connection.
Speaking to FinanceFeeds today, Bob Cortright, founder and CEO of DriveWealth, said
“Our goal at DriveWealth has always been to increase access to U.S. equities. We’re proud to partner with Markets Direct and MetaQuotes to bring our fractional equities offering directly to retail FX brokerages through MetaTrader 5” -Bob Cortright, founder and CEO of DriveWealth
For connected brokers with a MetaTrader 5 server, direct integration to multiple brokerage APIs is no longer required. Instead, brokers can simply order the MetaTrader 5 Gateway for integration with dealers, such as DriveWealth, to perform trades on U.S. exchanges.
Server to server connection makes it possible to trade DriveWealth’s fractionalized U.S. equities. Now clients can place any order size, even for less than a full share. For example, it is possible to place an order for 1/2 share of AAPL or 1.2345 shares of AMZN.
For far too long, brokerages have been under served when it comes to opportunities to offer experienced traders with developed portfolios a genuine product range and trading environment that would attract such a client base toward MetaTrader brokerages. This marriage of US Equities, futures and company stock via quality technology yet without the cost of exchange membership fees, clearing costs and high margin balances is most certainly the right way for the FX industry to go, as it preserves their familiar environment, yet opens them to a high quality, astute client base with a large number of assets under management.
Thomas Elster, CEO of Netdania stated
“We are thrilled to be releasing this now. It’s been a long process, certainly not something you build overnight. We view this as a game changer for us and for the industry as a whole. This product has it all – true multi asset, ultra-low commissions, MT5 compatibility – even allows brokers to plug their own liquidity into the mix. All of this is packed into an affordable tech offering.
“We are also very pleased to see all parts of the system fully connected and running smooth. It creates a whole new range of options for online brokers to diversify their product range, attract an additional client base and increase user retention. Especially an ideal match for FX/CFD brokers, looking to expand into more assets, while ensuring a top user experience where everything is traded via a single account. Add to this out-of-the-box integration with outstanding front-ends from NetDania and CQG, as well as instant MT5 compatibility, and you have a really strong offering.”
Multi asset trading is vital to the diversification of our industry and in order to bring products that interest highly sophisticated traders into the retail electronic trading fold, and to elevate the standards of client bases, and the industry’s remit as a whole, and whilst regulators and large exchange firms have been attempting to ensure retail trading goes on exchange, resulting in various lobbying of regulatory authorities by exchange entities to penalize CFD and FX brokers, and in large mergers and acquisitions that have involved exchange companies buying lots of OTC FX entities in order to gain a piece of the retail pie, none of these have made it easy for MetaTrader brokers to keep their existing infrastructure yet compete with the listed derivatives sector and enjoy onboarding such clients.