ETX Capital - 2016 New Website Review

Corporate History

ETX Capital (formerly known as TradIndex) is the trading name of Monecor (London) Ltd which was incorporated in 1973. The firm originally joined interdealer broker Tradition in 2000 as part of their institutional bond brokerage services. In 2002 Monecor became the retail derivatives arm of Tradition UK under the trading name TradIndex. The company quickly established itself as one of the leading UK providers of retail derivatives achieving growth of over 100% year on year.

In 2007 Robin Houldsworth and rag trade and pub entrepreneur Peter Shalson acquired Monecor for an undisclosed sum from Tradition UK Ltd. Later in 2008, the TradIndex site was re-branded as ETX Capital. The name ETX Capital reflects the company's core businesses of electronic trading, telephone trading and execution services. In 2014, ETX acquired its platform technology partner Ariel Communications which means that it can now offer a unique proprietary trading platform that isnít available anywhere else.

ETX Capital offer a decent range of markets with a good selection of equities. You have about 5,000 global markets to choose from when trading with ETX; markets ranging from indices, forex pairs, commodities, bonds, interest rates and a number of exchange traded funds. They also offer an impressive 50 forex pairs to trade. Margins are low and dealing spreads are competitive particularly on the most common currency pairs and on major indices in-hours. ETX Capital offer both web based and mobile trading platforms. The web platform features trade-thru charting, one-click dealing, fast execution, automated alerts and multiple watchlists amongst others.

ETX offers four platforms to choose from, ETX Trader, ETX Trader Pro, ETX MT4, ETX Binary

ETX Trader - This is a dumbed down version of the ETX Pro Platform and is targeted for beginners to get started. This offers a simple user friendly layout and the spreads are fixed (not variable i.e. the bid-offer spreads don't widen or get tighter as market volatility increases/decreases). This basic account comes with limited risk which means that you can never lose more than the amount you deposit since all trades come with a guaranteed stop. Downside is obviously that this basic account comes with wider spreads as all trades have a guaranteed stop attached to them.

ETX TraderPro - The ETX TraderPro platform is very similar to the ETX Trader but is designed for traders with larger accounts. It offers variable spreads that are based on market prices. The market range is the widest available and covers most asset classes (over 5000 products). The trading platform is web based so can be accessed anywhere. It comes with some advanced technical analysis tools and order types and I believe this will be the best choice for most traders. The ETX TradePro platform supports one-click dealing and features advanced charts where you can trade directly from the chart.

ETX MT4 [Meta Trader 4] - The most widely used trading platform in the trading world (although sometimes it perplexes me why so many traders use it!). The MetaTrader platform is mainly for forex, but not solely, as there are a number of other markets supported like commodities, precious metals, Brent crude oil, gas, US and German stock exchange companies and the major stock exchange indexes (UK FTSE 100, NASDAQ 100, DAX 30..etc). It is mainly used by traders who want to automate their trading activities with the use of Expert Advisors (EAs). The ETX MT4 platform supports charting with multiple charts display and has about 50 built-in indicators, plus access to 1,000s of indicators and Expert Advisors (EAs). One click trading is also supported.

ETX Binaries - ETX Binaries; fast-moving trading platform for binary options. This is powered by Markets Pulse with selected equities now available to trade. This platform will need its own individual login separate from the Trader Pro login, which can be applied for by clicking the Binary option on the from page of the new site.

In early 2016, ETX Capital launched a redesign of their entire website and platform. The colour of the website changed from green/black to olivey-brown colour but nothing much seems to have changed on the trading front. On the plus side they haven't messed up their web platform too much. It's still pretty simple and straightforward and now they offer the functionality to open a demo (trial) account which is a plus.

General Points

  1. ETX Capital (formerly known as TradIndex) offers inexperienced investors the ability to apply for a demo account to check how the trading platform works. This is available free of charge on ETX's Trader, Trader Pro and MT4 platforms. To open a demo account click here and scroll to the very bottom of the ETX website (look under 'My Account' options)
  2. All platforms now require the installation of flash player in order to perform optimally.
  3. All accounts still have the mandatory stop loss facility available however this will not be automatically turned on like the older platform. Trader platform offers wider spreads, but guaranteed stop loss on all trades with limited risk. Stop loss orders can also be moved out of hours.
  4. Credit facilities are not available. This, says ETX Capital, does away with a laborious sign-up process and the need for extensive credit checks.
  5. Good range of markets, if not exhaustive; stocks are quoted to 2 decimal places.
  6. Mobile trading is also available and it is possible to trade higher than £100 per point on the platform both online and over the telephone.
  7. ETX offers four types of markets: the dailies that expire when the market closures, daily futures which are based on the future price and again expire when the markets close, rolling daily bets which have the expiry and monthly futures.
  8. Research and Charting News headlines and charting from Trading Central is available to clients with accounts holding a minimum of 5k balance, plus economic events calendar. A daily e-mail with an overview of the day's financial headlines from the newspapers is also sent to clients at 6 am followed by a Corporate Snapshot at 8am providing a review of the day's earnings reports. Ransquawk and MNI news feed are also helpful.
  9. High net individuals also get access to a personalised research service where ETX collates research reports from different organisations and brokers on a particular stock.
  10. ETX Capital have recently re-launched their charting package (provided by I.T Finance and very similar to the IG package) which is available free of charge to all clients. Two charting applications are offered, a Light Plus chart and an Advanced chart.
  11. Novelty markets include being able to bet on the VIX (fear) index. Trading hours are 2.45pm to 9.15pm UK time and the minimum bet is £10 per tic.
  12. The company also offers an iPhone application while a Facebook application allows beginners to paper trade on live prices and even compete to win prizes.

Daily Rolling Bets, Futures and Financing Charges

For FTSE 100 shares ETX's spreads are between .08 and .1 percent added to or subtracted from the market bid or offer. For UK shares outside of the FTSE 100 they charge between .18 and .22 percent.

Rolling bets keep rolling until you close them out, you are charged funding for them but the profit/loss will only be realized when you close the trade. You can have as many open positions in the same product as you wish as long as it is in the same direction, but you cannot be long and short the same product. The financing charges are charged on the full amount of a position and with the present interest rates at 0.5% ETX may charge if the client is long or short of the market.

Future share bets aren't offered at ETX Capital BUT their rolling dailies differ to some of their competitors in that they will always re-open you the following day at the level that you initially traded at. So in that respect it will be like a future. For example: If you bought £20,000 of Vodafone at 132.2 it equates to approximately £151 per penny movement so your bet would be you bought £151 VOD Rolling Daily @ 132.2 - let's assume it closed at the end of the day at 140 - showing a profit and loss of £1177.8. Your funding would be charged overnight (approximately £1.65 and roughly at that amount every day) and your position would re-open at 132.2 the following day showing a profit of £1177.8.

Basis for Triggering of Stops

Stop losses on the ETX Capital Trader Pro's platform are executed based on the underlying traded market price with ETX's spread added to this. For example, although ETX's equity contracts are quoted using the underlying market bid and offer prices with their spread added to this, a stop loss would not be executed based on a low bid that has not traded in the market. Below is an example of what would trigger a stop loss.

You are long Apple Inc Rolling Daily with a stop loss to sell at 20259. In the underlying market Apple Inc is trading at 20275 to sell and 20285 to buy. With ETX's spread of 0.08% added to each side, ETX Capital would be quoting 20259 to sell and 20301 to buy. If the underlying stock traded at 20275 and your stop loss was at 20259, then you would be stopped out. If the stock only traded as low as 20285 then your stop loss would not be triggered even though ETX's current sell price is 20259.

ETX Capital: Parting Note

I have been with ETXCapital since 2002 and although their spreads are not the best I just really like using it. Perhaps ETX Capital can be thought of as a sort of no-frills version, fast and easy-to-use online spread betting platform with average spreads. Even so a wide range of markets are covered and they offer competitive bonuses and a variety of accounts and platforms. For instance, stock indices such as the FTSE 100 and the Nikkei are complemented with access to less common exchanges such as the Milan MIB and the Swiss market. ETX Capital also allows swing traders to take positions on commodities such as Brent Crude, High Grade Copper, silver, gold and platinum. Moreover, the site provides access to currencies, bonds (10 year UK gilts and US long bonds) and single shares from the major UK, US and continental European markets. My overall experience with ETX has been satisfactory so far although I've sometimes found their support slow to reply to queries. They are FCA regulated which means that funds have to be kept in segregated accounts. I recommend using the ETX Trader Pro platform as I believe it offers the best choice with tight variable spreads that are based on market prices. The product range is the widest available and covers most asset classes.

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