How to attract CFD traders to your brokerage Brokerage growth opportunities with CFD traders A report from The International Organisation of Securities Commissions indicates that there are many investors in the CFD market. In fact, “In Spain, CFDs are the main type of OTC retail leveraged product” with more than “€288bn in total underlying nominal value” sold to retail investors in a single year. The report also estimates that there are as many as a quarter of a million people who trade CFDs and other leveraged products in Germany and… read more →
Decisions made by the Swiss National Bank yesterday caused excessive volatility in the Forex Market. This recent debacle has proven once again the importance for risk management and trade reconciliation for brokers. Time and again we find that brokers do not put enough emphasis on managing their risk but instead choose to “fly by the seat of their pants” until it is too late. We have heard an extensive amount of complaints from sources that their liquidity providers have re-quoted, froze liquidity, and even altered confirmed ticket prices hours later.… read more →
With an increase in the sophistication of traders and growing demand for a wider range of trading products and trading platform, brokers have been adding trading systems to their offerings. As a result operations teams are finding it more challenging to run the business and require additional staff to meet demand. Managing multiple platforms and even multiple servers of the same brand means middle office and back office need to run a larger variety of reports and keep track of more diverse data in order to keep track of the… read more →
For brokers operating a true “no dealing desk” model, handling client risk isn’t much of an issue. What is a critical issue is trade reconciliation. In an article about risk management practices published in the Forex Magnates Q1 Industry Report, we discussed problems that brokers and dealers from the smallest shops to the largest global financial concerns face. While firms mentioned the importance of monitoring arbitrage, network latency, and market volatility, trade reconciliation was a universal item that companies needed to address. Trade reconciliation refers to the tracking of executions… read more →
One of the most difficult challenges that Forex brokers back office staff face is reconciling the accounting methods utilized in trading platforms with those methods used by the clearing agent be it an institutional liquidity provider or prime broker. In other words retail trading platform apply P&L, commissions, swaps and other charges differently than how the clearing partner applies them and as a result aggregate equity changes on the platform do not match equity changes at the clearing partner. Since the equity changes on the frontend do not correspond to… read more →
