Exclusive: Global Prime to Expand Institutional Offering

Although Global Prime, an Australia-based online trading provider, has been operating in the CFD and FX industry for years, the company is now entering into a new phase of growth and will be expanding both its institutional and retail offering, Finance Magnates has learned in a recent interview.

Earlier this month, Global Prime expanded its CFD offering by launching a specialist non-bank CFD Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term solution, which will reduce CFD spreads and improve fill rates. This, coupled with the appointment of Angus Walker as General Manager, are all part of the company’s next stage of growth.

Global Prime has been operating with its current management within the FX and CFD industry in Australia since 2011. The company has a retail and institutional offering through its trading platforms, and both are able to access its newly-launched CFD liquidity solution.

In an interview with Finance Magnates Elan Bension, the Co-Founder of Global Prime explained that over the next 12 months, the company will be focusing on bolstering its institutional offering and will also develop its retail side.

Global Prime to significantly expand over next year

Namely, Elan Bension said that the company has a full pipeline with lots planned to be announced over the next year. This will include leveraging its strengths, increasing the reach of its institutional offering, and will also flesh out its trading platforms by increasing and developing the products available via the platforms.

At present, Global Prime’s focus is its institutional offering, and within that, CFDs and FX, however, Elan Bension pointed out that the company will be going multi-asset. Although he wasn’t able to give too much away to Finance Magnates, he did say that the company will soon be announcing some big partnerships.

“Put it this way - we’ll be one of the few brokers that can honestly offer both an institutional and retail ECN experience because of the technology we’ll be using,” Elan Bension said. This, as Finance Magnates understands, will be made possible through the yet-to-be-announced partnerships and will make the company a rival to the likes of Fastmatch, FXall, and more.

CFD liquidity expansion kick-started growth phase

Kicking off Global Prime’s next stage of growth is its new CFD liquidity solution. According to Elan Bension, the solution came out of the need to service clients with sharper flow and improve execution. In order to do this, Global Prime has entered into a joint venture with a non-bank specialist CFD provider to improve its offering and help the company ramp up its operations.

According to a recent statement from the company, the new solution has seen the average spread during market hours improve considerably, while spreads as low as 0.5 points can be seen on the GER30 (DAX) and 1.2 points on the US30 (Dow). Fill rates have also improved markedly from 72 percent to over 99 percent.

This offering has actually been live since the end of last year, but the broker didn’t publicly announce the new solution until it had been stress tested. It’s safe to say that the past couple of months, which has seen unprecedented market volatility, has definitely provided the solution with a stressful situation.

Nonetheless, Elan Bension highlighted that the solution has proven to be solid despite the challenges faced by the markets. “It’s taken a lot of time, a lot of testing, and that’s why we want to get it in front of other institutional clients, including brokers and funds.”

COVID-19 highlights liquidity issues

With the onset of COVID-19, which has seen unprecedented market moves - negative oil prices and difficulties with gold, among others, Elan Bension believes there are a few takeaways in terms of how Liquidity Providers Liquidity Providers A liquidity provider (LP) constitutes an individual and/or an institution that functions as a market maker in a given asset class. Broadly speaking, liquidity providers will act as both the buyer and seller of a particular asset, thus making a market. In the equities space, many stock exchanges rely on liquidity providers who make the commitment to provide liquidity in a given equity. These liquidity providers commit to providing liquidity in the hopes that they will be able to make a profit on A liquidity provider (LP) constitutes an individual and/or an institution that functions as a market maker in a given asset class. Broadly speaking, liquidity providers will act as both the buyer and seller of a particular asset, thus making a market. In the equities space, many stock exchanges rely on liquidity providers who make the commitment to provide liquidity in a given equity. These liquidity providers commit to providing liquidity in the hopes that they will be able to make a profit on Read this Term operate.

“When the going gets tough, and the flow becomes a little bit sharp, most providers can’t handle it because of the way they price their CFDs and the way they execute order flows.”

Will the introduction of leverage restrictions pose a challenge to Global Prime’s expansion?

Although the company will be largely focusing on its institutional offering, the firm will still be expanding its retail reach. When asked if Global Prime was concerned about lower leverage levels being introduced into law, and potentially driving customers away, Elan Bension said the company isn’t worried.

This is because Global Prime mainly offers 1:100 leverage, and it has a different type of client base that isn’t chasing high leverage as well as an A-book only pricing model. So overall, the company isn’t worried about leverage restrictions.

“We have a different view, I guess, to the rest of the market in terms of leverage, and this is seen through our A-book execution model. Our view is that if you trade through a B Book broker, it's possible for a client's liquidity profile to be changed, and this may impact their trading”. Brokers with an A-book model like Global Prime can’t offer high leverage because it creates a credit risk that’s too high,” Elan Bension explained.