Over the last year, trading Analytics company CorrSight has gained traction in the fiercely crowded retail FX segment by providing brokers with what the company considers to be a solution to the low trader life-cycle problem.
Following on from this, CorrSight is now offering the Traders Compass software to binary options companies. The system can be integrated into the binary options platform and functionality includes the continual evaluation of traders’ current open positions, while keeping them up to date on market trends and economic events that could affect their trades. Messages are then sent to traders online through a variety of notifications.
Sustainability Through Lifetime Values
The lifetime value of a binary options trader follows a different pattern than that of a retail forex trader, as after a first time deposit is made, which is often between $200 to $800, the trader is often quickly contacted by a retention agent during which time a second deposit of a similar value may be made. In the event that the second deposit is lost, it is very rare that a trader will continue. The key is to ensure that traders are active long enough to turn a profit for the broker after all acquisition costs are covered, and that means increasing the length of time that a trader maintains an active account.
On this basis, methods of increasing lifetime values are of importance to binary options companies. CorrSight has taken this into consideration and engineered the binary options version of the Traders Compass tool toward actively encouraging the conversion of demo accounts into first-time deposits, and thereafter it works closely with a trader but discreetly pushes for more deposits and higher trading values increasing life value.
Activity Breeds Activity
In order to apply the Traders Compass to the binary options field, CorrSight established a collaboration with binary options brand iOption in which the two companies took close to a year to develop trading rules and strategies as well as analysis designed for binary option traders.
The tool is intended to guide and support the trader throughout his trading activity and increase his trading techniques’ knowledge and market awareness. Based on customer activity information, Traders Compass gives the trader real-time alerts regarding incomplete or less-than-optimal position definition and Risk Management . It also notifies the trader on market events and information. Through these alerts and notifications, Traders Compass enables the trader to better manage his positions and make more educated and insightful trading decisions.
Since last February, CorrSight’s system has become omnipresent in the retail forex sector, largely as a result of its affinity with Leverate in which it is provided to forex brokers as part of Leverate’s enterprise solution. Later in the year, the company attracted venture capital investment in order to further its market penetration of the Traders Compass platform.
Speaking to Forex Magnates regarding the launch, CorrSight's CEO Hudi Zack explained: "Over the last couple of years CorrSight has developed Traders Compass - a powerful rule engine and sophisticated interface & messaging mechanisms to help Forex traders in their quest to become more proficient and educated."
"After witnessing the recent exponential growth of the binary options market, we decided to expand our product and develop a similar service for traders in this market segment. With a lot of help from the iOption team, headed by Barry Norman, who gave us a lot of insight into this market, we successfully harnessed the powerful capabilities of our system to give a very useful solution for the binary options market.
"Our goal is, as always, to be the thought leaders and create innovative, gournd-breaking solutions for the benefit of traders and brokers alike. By supplying the trader with real-time, personalized and relevant messages, Traders-Compass improves the traders skill set and helps him manage his transactions more intelligently. At the same time this service helps the broker improve conversion rate and increase trading activity" concluded Mr Zack
Execution-Only, or Financial Advice?
Much has been speculated upon recently regarding the regulatory stance on electronic signals and interactive trading tools. It is still unclear as to whether authorities may begin to regulate the sale and use of electronic advisers, social trading platforms and trading signals. We asked Mr Zack his view as to whether regulators could in the future consider Traders Compass to be a form of financial advice and if it could fall under the auspices of regulators.
He clarified the situation thus: "From the regulatory point of view, our solution is not giving any investment advice. Rather, it helps the trader to manage his transactions more rationally by making him aware of trading best practices and relevant market events. As such, this service is well aligned with the regulators goal, which is to create a more transparent and informative trading environment."
