GAIN Capital Acquires Galvan Research as it Aims to Boost CFD Offering

GAIN Capital has announced today that it is acquiring Galvan Research, a UK based CFD advisory services firm, for an undisclosed sum. In GAIN’s public release about the deal, CEO Glenn Stevens commented that “Galvan Research gives us a solid foundation on which to build a comprehensive advisory service for our clients.” He added that “this transaction is an important step in enhancing our research and advisory capabilities in support of our recently expanded FX & CFD offering, which now covers 12,500 financial products.”

Among stated initiatives of GAIN Capital has been its move to expand its revenue sources beyond its core retail Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term offering. As a result, the broker entered futures brokering with its acquisition of Open e Cry in 2012 as well as devote more resources to the firm’s institutional FX offering. In its retail division, FOREX.com, GAIN is also positioning itself away from just being a forex broker, and launched TRADE, a CFD platform at the end of 2012. As such, the current acquisition of Galvan Research follows their existing trend of putting more emphasis on their non-forex retail products. In terms of profitability, CFDs have also been reported by brokers to be responsible for providing wider margins than in Forex Trading Forex Trading Forex trading is the buying and selling of foreign currencies with the aim of generating a profit. The value of currencies, especially floating currencies, fluctuate to varying degrees. This constant volatility of exchange rates opens the door for speculators to invest in a certain currency against another. The Forex market is the world’s biggest and most liquid market, with over $5 billion turnover every single day, with the market being open 24 hours a day, 5 days a week.It goes without saying Forex trading is the buying and selling of foreign currencies with the aim of generating a profit. The value of currencies, especially floating currencies, fluctuate to varying degrees. This constant volatility of exchange rates opens the door for speculators to invest in a certain currency against another. The Forex market is the world’s biggest and most liquid market, with over $5 billion turnover every single day, with the market being open 24 hours a day, 5 days a week.It goes without saying Read this Term.

According to terms of the current deal, Galvan Research will continue to operate under its existing brand, but GAIN will begin to integrate the firm’s advisory services to their trading clients. As a UK FCA licensed advisor, Galvan offers trade recommendations, sector reports, and weekly market updates to subscribers. While further details weren’t provided, the FCA advisory license may also provide potential benefits for GAIN in terms of complying with EU regulations applicable to copy trading.

According GAIN Capital, the deal is expected to close this quarter subject to regulatory approval and be accretive to 2014 earnings. Despite the potential boost in earnings, shares of GAIN (GCAP:NYSE) are down 2.4% to $10.09 in early trading today.