Interactive Brokers' Steve Sanders Talks FX & Regulatory Headwinds

Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term Magnates reached out to Steve Sanders, EVP Marketing and Product Development at Interactive Brokers for his stance on the firm’s FX operations and regulatory operating headwinds. His full length interview can be read below.

1. As opposed to private firms, do you feel publically traded brokers dealing in FX have been under more pressure this year to meet earnings and revenues?

It depends on how the Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term story ends for the year. When volatility is low, trading drops off in any market, and there is pressure for public companies to meet their earnings and revenues.

2. Interactive Brokers has been one of the more established names in FX, how has the industry evolved over the years and does it stand at a key regulatory precipice?

Interactive Brokers always offered the tightest forex spreads and an explicit low commission. For many years this was a hard sell against those offering free commissions. I believe that more forex market participants now understand that free commissions don’t translate to best deal. There is talk that the SEC might release new rules for forex. We would then have to understand the new rules and decide if we wanted to move our forex business to IBUK.

3. What do you feel are the advantages and disadvantages of being a US broker?

Advantage: safety of customer assets. Disadvantage: possible additional regulatory burden.

4. Interactive Brokers boasts a highly diverse product suite, where do you feel is the largest area for growth moving forward?

We continue to see robust growth as new customers located in more than 150 countries around the world see the advantages of opening an account at Interactive Brokers.

Consistent with our approach over the years, we will continue to add new local trading markets and expand our offering as the opportunity arises.

5. What makes Interactive Brokers unique, relative to other offerings?

• Our universal account that allows customers to trade stocks, options, futures, forex, bonds and funds from a single account on over 100 markets around the world
• Our transparent and low cost, commissions, financing rates and best execution
• Advanced technology