US Stocks the antidote to saturation for retail FX brokers, says Denis Peganov

“We saw a lot of demand for a trading solution which would allow clients to trade thousands of instruments from a single account and be stable and user-friendly at the same time” says FXOpen senior executive Denis Peganov

China Stock exchange

Last week, research by ETF provider GraniteShares showed that since the Coronavirus crisis started, 15.5% of people who own shares claim to have started buying and selling more, and 3% of the adult population – over 1.5 million people – say they bought some for the first time.  Only 10% of people who own shares say they have been trading them less since the crisis started.

This led to some senior leaders within the FX industry to be able to deduce that there have been quite a distinctive change of circumstances, those being that multi-asset trading is very much on the mind of the self-directed trader within some of the world’s most important financial markets centers.

Certainly, the need to move toward multi-asset capability has been somewhat pressing over the past few years, with FX brokerages remaining in two camps. The first being those wishing to invest in their own infrastructure and further their asset class range, as demonstrated by the large electronic trading companies with public listings and proprietary platforms such as Swissquote, IG Group, and CMC Markets.

The second camp is represented by firms which seek to continue to use the MetaTrader platform in order to maintain their core business, yet see the value in attracting new experienced traders with their own portfolio, hence offering multi-asset derivatives from the same platform via specialist solutions such as those offered by Markets Direct.

Today, in order to gain an insight into how large retail brokers look at this matter, FinanceFeeds spoke to Denis Peganov, Business Development Director at FXOpen.

Mr Peganov explained “The FX industry has been oversaturated for a while and we are happy to constantly see the influx of new clients who are not familiar with FX but are willing to trade other instruments. There is a lot of interest towards stocks, US stocks in particular.”

“We feel that one of the reasons for this are the low deposit interest rates which make investors seek different investing opportunities. Unlike FX, stocks and indices are something that they are already familiar with and are willing to trade on their own” he said.

“Therefore, we saw a lot of demand for a trading solution which would allow clients to trade thousands of instruments from a single account and be stable and user-friendly at the same time. This is why we have recently launched TickTrader platform and currently offer 600+ trading instruments with more being added each week” – Denis Peganov, Business Development Director, FXOpen
“We see that one of the biggest advantages for us as a broker is that this allows us to attract new types of clients and move to a different industry, which has a lot of potential” concluded Mr Peganov.

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.

Thus, 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.

As regulation ebbs toward limited leverage and looks to encourage brokerages to provide exchange-traded, less high risk investments, maintaining existing client bases on a familiar trading environment whilst extending the new product to them and in the process bringing on board equities and futures traders has to be a good move forward.

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.

It certainly appears that the FX industry is driving forward – however clearly the base of retail traders is telling us all we need to know.


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