I recently reported that in line with the industry's latest transparency trend Gain Capital (Forex .com) has released its own execution scorecard which showed the percentage of limit orders executed at better prices and the time it took to execute orders. I followed this up with some questions to Glenn Stevens, Gain Capital's CEO. Glenn is one of only few forex CEOs who take the time to personally get in touch with the forex media and answer our questions. I hope more CEOs will start doing the same.
Q: What made you decide that you are starting to release those metrics? It's not a requirement by NFA/CFTC. Is this a part of the more transparent forex industry as I think it is? I see many brokers starting to do similar things lately.
A: With the increased focus on Execution quality in retail forex, we were concerned that traders were being presented with biased information. This is especially true of the claims being made about the advantages of the so-called ‘no dealing desk’ model. What stuck out to us was the lack of hard facts to support the claims being made.
We feel strongly that our execution model has advantages for our customers as well as for our business. It doesn’t have to be one or the other. We are aligned with our customers in that their success will ultimately lead to our success. Voluntarily publishing our execution scorecard felt like the most obvious, straightforward way to communicate our point.
While a few other brokers have made similar execution statistics available to the public, in our opinion they are not well-defined. We believe that transparency is not merely accomplished by providing the “numbers” - but also by clearly articulating how the numbers are derived.
Q: Most traders weren't impressed by these metrics because they don't show the amount of orders accepted vs rejected but only show execution time for accepted orders only. Will you release such metrics? Otherwise it doesn't look transparent enough.
A: We have been very pleased with the response we’ve received to date and are encouraged by the feedback. Generally speaking, the trading community has recognized our efforts to bring greater transparency to retail forex and we will continue to work in this direction. It has always been our intent to make additional data available and we will be doing so over the coming weeks and months.
In addition to the execution scorecard, we recently made our Live Spreads available on our website. In addition to our Spread Table, which is updated monthly and provides information on our minimum and typical spread by currency pair, you can now also view our current spreads on our website. This additional level of transparency further demonstrates our commitment to providing traders with all the information they need to make the best decision when selecting a forex provider.
Q: Will you be releasing any more metrics - perhaps in line with what FXCM says it is going to do with its Forex Execution Center?
A: Yes. We do have plans to make more metrics available. It seems inevitable that this type of information will become the norm in our industry; we hope that our scorecard becomes a catalyst for greater transparency in the retail forex industry.
