Week in Focus: Fed Cuts Interest Rates, NAGA Brings CFDs to Telegram, and More

Only 7% of 300,000 Prop Trading Accounts Achieved Payouts

Our news summary begins with the exclusive story we covered this week, highlighting the elusive success in proprietary trading. According to FPFX Tech's data, only 7% of investors manage to turn a profit. Among those who do succeed, the average earnings are modest: just 4% of their allocated capital.

Prop trading is dominated by men, who make up 78% of all trader-funded firms clients. This type of investment is most popular among Gen Z and Millennials, who together account for over 60% of all clients. The data comes from FPFX Tech, a fintech that specializes in providing technology solutions for prop trading firms, offering software-as-a-service (SaaS) solutions.

NAGA Brings CFDs to Telegram

NAGA Group, which recently merged with CAPEX.com, launched the “NAGA Everything Trading” app. The app allows retail traders to access trading directly from Telegram’s App Center. It also enables NAGA users to onboard, complete know-your-customer procedures, deposit funds, and trade financial instruments without leaving the Telegram app. According to NAGA, this feature will also assist in its global expansion.

NAGA pointed out that direct access to its platform from Telegram is “a gateway to a massive, previously untapped audience.” Furthermore, it will allow traders on Telegram to access both web and mobile versions of the NAGA app. The trading platform has further plans to introduce more features to the new Telegram-based initiative, including the addition of Social Trading with AutoCopy in upcoming monthly updates. However, Telegram also remains one of the hotbed for financial scams.

Finalto’s UK Units’ Combined Profit Doubled in 2023

And in financial results, two UK-registered entities of the Finalto Group, Finalto Trading Limited (previously Tradetech Alpha Limited) and Finalto Financial Services Limited (formerly CFH Clearing Limited), ended 2023 with a combined turnover of more than $74.1 million, a decline of about 7.9 percent. However, combined profits soared to $13 million from 2022’s $6 million, a year-on-year jump of 116 percent.

The annual revenue of Finalto Financial Services jumped to $61.5 million from the previous year’s $44.5 million, while Finalto Trading’s revenue dropped to $13.2 million from almost $36 million. The decline in Finalto Trading’s revenue was due to the migration of clients to its sister entity, Finalto Financial Services.

Hantec Markets' UK Unit Reported Losses in 2023

The UK unit of Hantec Markets ended 2023 with an annual turnover of over £6.8 million, an increase of almost 24 percent from the previous year. However, the company turned an operating loss of £47,437 compared to a profit of £36,058 in 2022.

According to the filing with Companies House, the forex and CFD operator detailed that the operating loss was caused by additional IT expenditure incurred towards the end of the year due to the introduction of a new technology strategy.

ThinkMarkets UK’s 2023 Profit Dived 71%

The British entity that operates ThinkMarkets, a forex, and contracts for differences (CFDs) broker, ended 2023 with an annual turnover of over £2.4 million. This represented a 14.2 percent decline from the previous year’s £2.8 million. The profits of the unit also dropped substantially, as the net figure sank by 71 percent to £82,925.

According to the latest Companies House filing by TF Global Markets (UK) Limited, which is regulated by the UK’s Financial Conduct Authority, the company reported that its pre-tax profits halved to £151,668 from 2022’s £300,025.

Labuan Regulator Limits FX and CFDs Brokers' Offerings Only to Currency Instruments

The Labuan Financial Services Authority (LFSA) is restricting locally regulated forex and contracts for differences (CFDs) brokers to offering only currency-related instruments, such as spot FX and CFDs on FX. This means these brokers will no longer be able to offer non-currency-related instruments like CFDs on shares, ETFs, and commodities.

The changes come as the regulator, which oversees financial services companies in Malaysia, tightens the licensing rules for all locally regulated money brokers, the default authorization for FX and CFD brokers. Under the newly announced rules last week, the paid-up capital for all locally authorized money brokers will be doubled to MYR 1.5 million (about $349,000).

French FX/CFD Trader Numbers Fall Below 30,000, Lowest in 4 Years

Two new reports released by Investment Trends show resilience in the French online trading and listed derivatives markets despite recent declines in active trader numbers. The studies reveal evolving investor profiles and highlight opportunities for brokers in a changing landscape.

In the leveraged trading space, the 13th edition of the France Leverage Trading Report reveals that French CFD and FX trader numbers remain resilient compared to other markets studied. While overall trader numbers have declined, testing four-year lows, they remain above pre-pandemic levels, retaining half of the growth achieved during that period.

MetaTrader 5 Now Supports over 40 Payment Options for Global Traders

MetaTrader 5 now supports more than 40 new payment methods customized to different regions. With new methods ranging from popular digital wallets to local banking systems, MetaTrader 5 is targeting global traders with different transaction options across various markets.

According to an update on its website, MetaTrader 5 features new payment options covering a wide range of regions. These methods complement traditional payment channels like bank cards and wire transfers.

UAE Outshines Germany and Hong Kong as Top Tech Destination, Survey Shows

The UAE is quickly growing into a global technology hub, capturing the attention of Asian tech professionals. A recent survey by Capital.com reveals that 81% of Asian tech experts view the Middle Eastern country as an increasingly important tech destination. With nearly half expressing a willingness to relocate there, the UAE surpasses traditional favorites like Germany and Hong Kong in appeal.

The survey, conducted across Singapore, Hong Kong, Vietnam, and India, highlights the UAE's attractive status in the tech industry. This emerging reputation is driving a noticeable shift in tech talent preferences. The UAE's supportive government policies and favorable business environment are key factors contributing to its growing appeal. 76% of respondents believe the UAE offers a conducive environment for tech development.

“Go Beyond Traditional Risk Management”: Brokers Must Adapt amid Hezbollah's Pager Blast

In one of the trending topics globally, “Brokers' operational systems must go beyond traditional risk management,” CFI Financial’s Global Head of Education and Research, George Khoury, told Finance Magnates amid the recent pager and walkie-talkie blasts in Lebanon that have created a new wave of tensions in the Middle East. He highlighted that “escalating geopolitical tensions contribute to uncertainty in financial markets, particularly in the forex and commodities markets.”

The Middle East is one of the fastest-growing regions for retail trading activities. The potential interest among Middle Eastern traders has led brokers to establish a presence in the region, mostly in Dubai. However, many brokers also maintain extensive operations in tense countries.

Axi Enlists John Stones as Brand Ambassador Alongside Manchester City Renewal

Online trading broker Axi expanded its partnership portfolio by announcing John Stones as its latest Brand Ambassador. This follows earlier sponsorship announcements made in 2023. John Stones is a prominent defender for the England national team and has played for Manchester City since 2016.

He has made over 200 appearances for the club and secured 13 trophies, including the Treble in the 2022/23 season. Stones is recognized as one of the top defenders in football. He has successfully transitioned from a center-back position to a midfield role.

Robinhood Nets Jersey Sponsorship Deal with NBA Memphis Grizzlies

Still, in the sporting arena, Robinhood will sponsor the American basketball team Memphis Grizzlies as the official jersey patch partner. This partnership, set to begin in the 2024–25 NBA season, will place the fintech giant’s logo on the Grizzlies’ uniforms. According to the club, this multi-year deal features Robinhood across the Grizzlies' ecosystem, from baseline court ads to social media and during broadcasts.

Commenting about the sponsorship deal, Ted Roberts, Grizzlies’ Vice President of Partnership Marketing, said: “Today, we're excited to announce that Robinhood Markets, a progressive leader in financial services, will be the official investing and jersey entitlement partner of the Memphis Grizzlies. Never settling and challenging the status quo are characteristics of our organization and fans, and in Robinhood, we have found a perfect match.”

Bitget Becomes Sponsor of Football League Featuring Lewandowski, Mbappé, and Vinícius Jr

Additionally, cryptocurrency exchange Bitget inked a new partnership with Spain's top-tier football league, LALIGA, becoming its official crypto partner for Eastern, Southeast Asian, and Latin American regions. The collaboration unveiled at the Token2049 event in Singapore, marks Bitget's move into the sports sector across emerging markets.

The multi-million dollar agreement grants Bitget extensive exposure to LALIGA's massive global fanbase, while the football organization stands to benefit from comprehensive Web3 solutions. This partnership aligns with Bitget's “Make It Count” philosophy, which emphasizes achieving greatness through perseverance and positive passion.

Revolut Expands Crypto Offerings with Planned Stablecoin Launch

Keeping tabs on crypto, the fintech giant Revolut is planning to launch its own stablecoin, according to sources familiar with the matter. With plans to strengthen its crypto-asset offerings, the London-based firm aims to join PayPal, Ripple, and BitGo in the highly profitable stablecoin market.

Insiders suggest the firm is positioning itself as a key player in the space, promising both compliance and security for crypto users. Revolut's ambition to introduce a stablecoin comes as the sector experiences an influx of new participants. Dominated by Tether's USDT, which has a market cap of approximately $119 billion, the stablecoin space is increasingly attracting fintech and blockchain firms.

Ex-CEO of Admirals Launches DEX White Label Solution on Solana

In another of our exclusive stories, Victor Gherbovet, who previously collaborated with the FX/CFD broker Admirals for over a decade, launched his own software-as-a-service (SaaS) technology company, FirstByt. Now, as Finance Magnates exclusively learned, the company is introducing a white-label solution for firms looking to launch their own decentralized cryptocurrency exchange (DEX) within a few days.

FirstByt unveiled its first products in April this year, though the company had been in development for the past few years. Now, as Finance Magnates has learned, the company is introducing one of the first DEX white-label solutions on the market, dubbed DexTrader.PRO starting with the Solana blockchain.

Dow Closes Above 42,000 Following Fed's Interest Rate Cut

Discover how the Dow Jones Industrial Average broke the 42,000 barrier in response to the Federal Reserve's aggressive interest rate cut. The Dow Jones Industrial Average achieved a historic milestone, closing above 42,000 for the first time.

This landmark event was catalyzed by the Federal Reserve's recent half-point interest rate cut, which has not only bolstered market confidence but has also reinvigorated the economic landscape, making it a pivotal moment for investors and policymakers alike.

Your Paycheck vs. Inflation

Lastly, despite the hype around wage growth, the truth is that salaries are barely keeping up with inflation. In July 2024, wages in the US rose by about 4.4%, according to the Wage to Inflation Index by Bankrate. Sounds decent, right? Not so fast. Inflation during the same period clocked in at 4.7%. So, while your paycheck might have grown a bit, it’s still not enough to cover the rising cost of living.

Interestingly, while the labor market remains tight, it’s not enough to give workers the leverage they need for better wages. Companies are more cautious, holding off on salary hikes as they brace for potential economic slowdowns. So, you’re left with wage growth that looks good on paper but does little to help you in real life.

Until next week!