Here's a past interesting story outlining Delta Index's Conor O'Neill's background
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Interview: Why spread betting means more power to your elbow. It's not merely a form of gambling, argues Conor O'Neill, the founder and chief executive of Delta Index (pictured on the right) — 'What we try and do is empower the investor'
"I WOULD actually think that Delta Index is hated by a lot of businesses," laughed Conor O'Neill, the founder and chief executive officer of the aforementioned financial spread betting company.
It is an unusual statement from the head of any firm, particularly from a measured, pleasantly analytical cove such as O'Neill, a qualified actuary.
This possible antipathy is, however, attributed not to dislike of the company itself, but to the distracting properties of playing the markets while pretending to work.
O'Neill explains that some managers, particularly in Dublin's financial institutions, believe that having employees playing Delta's markets on their desktops can seriously damage productivity.
After all, who cares about your employer's trifling problems when you're busy shorting oil at a tenner a point? Delta Index allows the ordinary punter to gorge on a dazzling series of positions taken on such diverse delights as gold, commodities, market indices and blue-chip equities, as well as more volatile beasts such as Elan.
In truth, having any sort of bet on Delta Index is likely to be volatile. Therein lies the charm that has seen the company cross into profit this year, with 16 full-time staff and annual revenues of about €2m.
"We have now got a very clear idea of what our proposition is," said O'Neill. "We offer the retail investor access to the wholesale financial markets."
Revenues come from the small difference between what an "institution" such as Delta pays the wholesale broker for a trade and what the desktop tycoon coughs up in spread to Delta.
"For example, AIB has had a good run recently to reach €18," explained O'Neill. "If you think that's as high as it's going to get and that it will fall back, you can come to us and we'll offer a spread of, say, 1800-1810, which allows you to sell at 1800 for maybe €20 a point. A wholesale broker such as Cantor Fitzgerald may quote us something like 1803-1807, so there is margin there for us."
The main advantage for Delta and its regular client base — which O'Neill reluctantly reveals numbers about 1,000 — is that any gains are, like gambling winnings, tax-free.
However, O'Neill and his team now want to sell the company's product on a slightly different basis, stressing the sheer variety of products it can offer numerate (and solvent) traders.
"I don't know how I can say this without getting shot," he mused. "But I think that the ordinary investor is not best served by the established investment community. In many cases, they do not get a lot for the fees and commission they pay. What we try and do is empower the investor." Empower the investor? More marketeer-inspired piffle, surely? "No," he responded. "We now live in a country where nearly everyone has access to Bloomberg and CNBC, and the web has a huge amount of financial information. In most cases, an individual can reach the same information as any expert."
O'Neill and his co-founder, Michael O'Shea, have already diluted their shareholding by welcoming the stockbroker Dolmen on board as a minority shareholder in a deal that valued the firm at about €6m.
As yet, Delta hasn't faced any sustained competition from the two large UK financial spread-betting companies, IG Index and City Index.
"They keep on threatening to attack the market, but they haven't yet," said O'Neill. "In fact, it mightn't be a bad thing if they do. Anyone who has used our system seems to find it useful, so if they raise awareness of financial spread betting, it can only be good for us."
O'Neill returns to his theme of "empowering" the investor.
"I feel that we have to start pushing the risk management element. If someone has a pension fund in a certain equity market, we are a very easy way to hedge that risk or lock in profits."
The idea for Delta came to O'Neill in 2000, after he had left his job as a director and shareholder in Life Strategies, an actuarial consultancy.
He decided to do an MBA, but, in the meantime, found that he was making "ridiculously easy money" by shorting the grossly inflated equity markets at the time using the UK financial spread-betting firms.
"The huge advantage to what we do is the ability to sell, and that's how I got into it," he said.
"I have known Mick (O'Shea) for years and we had decided that we would set up a business when he got back from America. I got him to start trading and we were both making plenty of money. We said to ourselves, 'This is great, maybe there's a business here.' "
Things took off when Delta employed Dermot O'Donoghue, the former head of treasury at AIB, as a stakeholder in the business.
"Dermot brought the wisdom of years and senior management experience to us," he said. "What we were really missing was sales and marketing expertise, but we have that in place now."
O'Neill completed his MBA at UCD, but is only mildy enthusiastic about the experience.
"It taught me a lot, but I have to say that I think an MBA is more geared towards people who are building careers in large corporates rather than entrepreneurs."
Delta Index is currently enjoying a mini-boom as mid-ranking suits around Dublin have begun to play the oil markets with gusto.
"A lot of people have made very good money on oil with us in the last month or so," said O'Neill. "But some have lost as well. I'll warn you, though, it's good fun, but it's fairly compulsive."
As regards future plans, O'Neill states matter-of-factly that the growth lies in Europe.
The EU will shortly introduce legislation to regulate the financial spread-betting industry across Europe and this will open up the potential of expanding into countries where the concept doesn't currently exist.
It's a nice thought. Managers of businesses in Frankfurt and Madrid cursing a little Dublin company for soaking up their employees' attention.
WE open at 7.30am for trading, so I'm in by then. I'll have a look at how all our markets are doing and the day is pretty much office-based with meetings. We are concentrating a lot more on sales and marketing these days, so we do have roadshows and seminars around the country. I try and leave the office when the UK and Irish markets close.
Vital statistics
Age: 38
Home: Sandymount
Education: PBC Cork, UCD (MBA)
Family: married with two children
Hobbies: tennis
Favourite movie: LA Confidential
Favourite book: The End of History by Francis Fukuyama