Financial-Spread-Betting: Today we are pleased to interview Regina Malzburg of ETX Capital (formerly known as TradIndex).
Financial-Spread-Betting: Hi, can you introduce yourself and your company to our readers?
Regina: ETX Capital.com (www.ETX Capital.com) is a FCA regulated financial spread betting company. The site offers a range of products suitable for a broad spectrum of investors including; major stock indices, currencies, commodities, single shares and bond futures. ETX Capital is headed by Andrew Edwards who joined the company from City Index immediately after it was launched by Tradition, the interdealer broker, as TradIndex in 2003.
Financial-Spread-Betting: When did ETX Capital first open for business? What does ETX stand for?
Regina: ETX Capital launched in April 2002. The letters ETX do not stand for anything in particular, and it does not mean anything. The two main things we looked for when we were throwing around various names was that it was international and that it would not cause offence in a foreign language.
Financial-Spread-Betting: Tell us some more about your origins?
Regina: Originally, the TradIndex business was setup to cater for the speculative inclinations of Tradition's high net worth customers with most deals being conducted over the telephone. The operation was then shifted away to broaded the customer appeal and take the business online. This has meant that we have had to pour resources into educating the punter and now we run regular seminars and webinars. 'It is critical to educate less sophisticated customers in the types of products we have, in risk management and about markets in general'.
"If it helps clients make more informed decisions, if it helps them be aware of risk management, if it makes them trade better, then it makes them better customers. I know what you are going to say: 'that we want the customer to lose'. That is not what our business is about.
"At the end of the day we do not want the end customer to lose because we can then lose the client. For us, the game is about the spread capture. In a high-volume, low-value game, whether the clients win or lose is irrelevant [financially] to us. What we want to see is the customer trading for longer."
Financial-Spread-Betting: Tell us about ETX Capital today.
Regina: Between the years 2008 and 2011 ETX invested heavily - about £5 million to improve its technology to the point that we now have a very competitive offering complete with mobile phone apps and we want clients to view us as chosen provider because of the high level of service that we give - and we have sticked to the level of personalised service that we offered our original customers. ETX Capital's London office currently holds 130+ in staff.
Financial-Spread-Betting: Where exactly is your business located?
Regina: ETX Capital's office is in the City of London, close to Liverpool Street Station. The address is: Beaufort House, 15 St. Botolph Street, London EC3A 7QX
Financial-Spread-Betting: Do you insist on a mandatory stop-loss on all positions taken by clients? If so, why?
Regina: The ETX Capital website has been designed to protect the investor. Customers are not given credit ensuring they do not bet money they don't have. Mandatory stop losses are no longer applied to all trades but all customers are able to place stops and limits on the new platform.
Financial-Spread-Betting: What are the minimum/maximum stakes?
Regina: The minimum stake on currency pairs can be as low as 10p per point, maximum stake is dependant on the market requested.
ETX Capital Trading Platform - (click on thumbnails for a closer look)
Financial-Spread-Betting: What is the minimum deposit required to open an account? Is there a maximum deposit?
Regina: The minimum deposit on an account is now 100.00 (£/$/€). With £100 and above clients will be able to trade on most of the available products.
Financial-Spread-Betting: Do you accept deposits by BACS?
Regina: Yes we do.
Financial-Spread-Betting: Do you accept only UK clients or are international users also welcome?
Regina: ETX Capital will accept clients from all countries that are members of the FATF (Financial Action Task Force on Money Laundering), except clients from the US.
Financial-Spread-Betting: Are there any general safeguards for clients - protected accounts for clients' money or segregated accounts...etc?
Regina: All clients funds are held in a segregated account. As a regulated company ETX Capital complies with all given security recommendations by the FSA.
Financial-Spread-Betting: How wide are the spreads? How do they compare to other spread betting firms?
Regina: ETX Capital spreads are very competitive. The actual spread size varies from market to market. A full list of spread sizes can be obtained from the ETX Capital site.
Financial-Spread-Betting: Why should clients choose you?
Regina: ETX Capital is designed to make financial spread betting easy particularly for the novice investor. We offer a simple, clearly laid out spread betting service with access to many of the major global markets. With online registration and minimum trading levels of only GBP 1 per point, clients can be up and trading in no time at all, spending as little or as much as they like. In addition, a clear, easy to use site makes browsing and trading as easy as it should be.
Financial-Spread-Betting: What are the margin requirements?
Regina: ETX Capital margin requirements are very competitive and some of the lowest in the market.
Financial-Spread-Betting: What instruments are available to bet on at ETX Capital?
Regina: Indices, Single Shares, Commodities, Currencies and Bonds are available to trade via daily or quarterly bets.
Financial-Spread-Betting: As of now, what trends do you see in the markets people choose to trade? Are there certain markets that clients seem to prefer? Do you think this will change over time?
At this point, traders are still interested in stocks despite conditions being difficult. Their trades seem to have become more short-term as the dynamics of the equity markets have changed.
Preferences for markets always changes over time. US indices are very popular with clients. The Dow, for instance is a hugely popular trade - even beginners know the index from the news headlines. I'd say that around 50% of the trading volume we see goes on indices. Recently, commodities and especially gold, were flavour of the month, but interest in these seems to have now waned. Customers can also trade on currencies such as cable and euro/dollar: 'Cable is definitely creating an atmosphere, as it's so close to the magic two-dollar mark'. Market players are also becoming increasingly worried that the Federal Reserve's aggressive interest rate cuts will not be enough to reverse the sharp economic downturn and will at the same time send inflation soaring. This is prompting a flight to quality...
Financial-Spread-Betting: We have noted that you have launched a new trading platform which seems to be already attracting good comments from the public. Can you tell us something more about it?
Regina: This year we have launched a new trading platform. The new improved website has a cleaner look and feel with faster more intuitive navigation, and includes moveable stop losses and accelerated registration. This faster navigation allows traders to deal in half the time, compared to the old platform.
Financial-Spread-Betting: Are there traders who make a living through spread betting at ETX Capital?
Regina: Some of ETX Capital traders seem to trade very regularly and we have spoken to several clients that consider 'day trading' as their main source of income.
Financial-Spread-Betting: Do you hedge the client aggregate positions or bear the risk yourself?
Regina: ETX Capital manages and hedges all client aggregate positions.
Financial-Spread-Betting: Are there issues of competition between spread betting firms and conventional firms where the products they offer carry similar economic exposure but where best execution is applied differently?
Regina: Yes - most spread betting companies quote an immediate execution price - in other words when dealing on a spread betting company web site the price one deals on is not necessarily the same price the spread betting company may achieve in the market when hedging that trade. Spread betting companies are market makers and therefore take on market risk before hedging out the position - this however does not exempt them from offering best execution - in some cases spread betting companies offer better prices than the market itself
Financial-Spread-Betting: Tell us about the recent market volatility and what happens typically behind the scenes at your offices.
Manoj, equity derivatives dealer at ETX Capital responds: I come in from Harrow and get to my desk at the office in Aldgate at 6.30am. The first thing I do is look at what the Far East markets have done and where US futures are trading to get an indication of what might happen.
Every morning is basically the same, although some are a bit more tense than others. For instance on one particularly volatile day we expected to see extended selling from yesterday and initially we were calling the FTSE down 40 or 50 points. As it got closer to the start we realised is was going to go a lot lower, so there was some frantic ringing back to keep clients informed. When trading began and the FTSE sank, it was mayhem.
There are around 40 people in my office alone and there can be a lot of noise. Everyone is either on the phone or running around, or calling out rumours or demanding information. There were not many signs of panic at our place I have been doing this 12 years and most of the guys are experienced. But still, nearly 250 points down in a few minutes is bad news.
Most dealers were sitting on their hands, looking for signs of a comeback. But that meant the market was tumbling on very low volumes. You know that, somewhere, people are looking at ever bigger losses and just praying the red screens will flip back to black. There was a huge amount of relief when it rallied. You could hear people sucking in breath.
Things calmed down about 10am, and traders could sneak off for a coffee or a cigarette. After that a few investors started dipping into shares, having a dabble into retailers and some of the stronger banks. But mostly we were just watching America.
It has been like this for years now the market has been volatile since early 2000, so it is just part of life. I will not get to bed tonight until midnight. And tomorrow we will do it all again...
Financial-Spread-Betting: Any remarkable incident/trade that happened you could share with us?
Regina: We have seen a lot of speculative activity just after the Japanese earthquake and tsunami. All of a sudden, everyone had an opinion on the yen. 'Was the yen looking cheap or was it going to fall further? People were looking for the opportunity in market movements.' And they took a trading view.
Financial-Spread-Betting: Tell us what the future holds for ETX Capital?
Regina: At the present time we are focusing on developing mobile trading applications and we have already developed bespoke trade-through charting software - which allows clients to deal interactively via a graphic and chart your trades, allowing you to pick points for buy or sell orders, stop loss or limit orders.
Financial-Spread-Betting: This concludes our interview with Regina Malzburg and Andrew Edwards, of ETX Capital (formerly known as TradIndex). Please feel free to browse other articles on this site and come back next week for our next exciting interview. If you have any questions regarding this interview or would like to suggest an interview, please contact traderATfinancial-spread-betting.com
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