In the inaugural years of this Millennium, there was a sudden and seemingly unstoppable increase in the number of new electronic trading companies being established, and along with it came the rise to prominence of an island in the eastern Mediterranean which had previously been associated with relaxing tourism and renowned hospitality.
That island is Cyprus, and now two decades on, it is one of the world's most important and developed regions in retail electronic trading.
Cyprus is therefore the natural home of iFX EXPO International, which is the annual event that attracts all participants in the fintech and global brokerage business and is rapidly approaching. At this year's iFX EXPO International which will be held on June 19 and 20 at the Mediterranean City of Dreams resort in Limassol, Senior FX industry executives will share their views on current important topics.
On June 20, between 16:00 - 16:45, Andrew Saks, Chief Product Officer at TraderEvolution Global, a back end-first, multi-market, multi-asset trading platform technology provider, will engage in a poignant discussion alongside esteemed professionals from various components of the electronic trading industry in a panel discussion relating to whether there is strategic value in an established retail brokerage establishing a prop trading division.
The rise of proprietary trading stands out as a prominent current trend in the retail trading sector, with numerous brokerage firms utilizing their own capital to engage in direct trading of various assets such as stocks, bonds, and commodities as well as firms diversifying away from the core business of onboarding and retaining retail FX and CFD trading customers toward offering 'funded trader'-style trading competitions on demo accounts.
Whilst these ‘funded trader’ style enterprises are a current trend, it is important to consider the method by which brokers can adapt their operations or expand their business toward any new direction that becomes popular.
During the discussion which will be moderated by Anton Sokolov, Marketing Manager at Brokeree Solutions, TraderEvolution Global’s Andrew Saks will look closely at the effect that having business operations or a growth strategy curtailed by an external service provider can have, and how such a circumstance has brought to the surface an important issue that TraderEvolution has been actively resolving for brokerage companies, that being ensuring that TraderEvolution’s clients have full control over their operations and the direction of their business by having their own trading infrastructure.
Many technology providers which have forged long term relationships with brokerage companies and whose core business activity has grown around firms which are now large enough to expand their services have in some cases started restricting services for companies offering services such as prop trading, therefore for companies wanting to look toward expanding into that area should look toward investing in their infrastructure to avoid having their growth plans curtailed by their technology.
Taking a wider view is also vital because the restriction of service by technology vendors is not limited to prop trading. Over recent months, there have been many examples of a whole host of other services which are less radical and more the result of organic growth by brokerages having been suspended or canceled by technology companies, meaning that existing customers using those services can no longer be supported.
This is especially damaging when brokers have expanded their services toward a business to business (B2B) audience and have contracts to offer products or services to those firms, and suddenly have to stop doing so due to an external company dictating its sudden change of terms.
TraderEvolution Global’s Andrew Saks considers that it is not just the current array of new prop firms and brokerages entering the prop trading segment to whom consideration toward how their technology is structured should be vital.
It should be a primary consideration of all firms in the electronic industry wishing to look toward organic growth regarding how to structure a business in order to be able to scale and expand to offer services such as prop trading without external barriers.
The panel discussion will be of great interest to all parties with a commercial interest in retail electronic trading, and therefore is set to be one of the topics to look out for at the iFX EXPO International, as Andrew's expertise and perspective combined with his long-held view that the pragmatic way to scale a brokerage is to invest in autonomy in the way that firms with in-house developed platforms have done, seeks to provide useful insights and points to consider for those considering joining the prop trading trend.
