fxstreet makes an investment in Kantox
Although forex industry is highly profitable for some reason most of the profits aren’t invested back in innovation. We don’t
Although forex industry is highly profitable for some reason most of the profits aren’t invested back in innovation. We don’t see many investments and M&As (except broker mergers) as you’d expect from an industry with such high turnover. The only ‘portal’ deals we had lately were the acquisition of EuroInvestor portal by Saxo Bank and FXstreet partnering with websites like myfxbook and forexcrunch for ad-space inventory management.
It’s refreshing to see FXstreet making an investment in a start-up forex business leveraging its leading position in the market and vast experience and helping the new company not only with money but also with advice and marketing push (no plans were announced but I assume FXstreet would help push Kantox to its clients).
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Kantox is the alternative to traditional FX hedging products offered by banks (forwards, options, etc.). Kantox created a netting marketplace where companies can look for and find others companies – their counterparties – with opposite currency flows to match and net their flows. Hence Kantox is able to offer a transparent and fairly-priced FX hedging solution without banking intermediation which does not require any kind of margin deposit nor margin call to close your hedge.
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wont survive!
Yes… why not?
It’s nice to see companies like fxstreet investing in other start-ups in the FX space.
There is definitely a market for improving the cost and efficiency of currency exchange and risk management for companies. I hope Fxstreet will complement this with education for corporates on the FXmarket and ways to hedge risk.
Good luck.
— Asaf.
excellent idea Asaf!
How is the risk managed? Say one of the companies on one side goes bust? The other guy sits there expecting it to be hedged. Saw that they do due diligence and all, but what is the main benefit of using a bank or smaller provide to hedge it, the saving isn’t that much considering Kantox charges. Hope it goes well anyways, but sounds like a risky venture for a marketing company.
Dear Gavin, Exactly as when hedging with a bank or a broker, a credit (counterparty) risk exists in the event of counterparty’s default. To manage credit risk, Kantox uses 6 ways: 1.Due diligence, KYC & AML: Kantox makes a due diligence of every client and, based on credit information provided by a recognized third-party, only allow creditworthy companies to operate in the platform. 2.Once registered, Kantox will attribute to every client a credit rating. This rating being accessible to clients, they can easily and transparently analyze the credit risk of their counterparties in any moment they might need. 3.Kantox provides… Read more »
Andy – It could be deemed arbitrage and i have known market makers cancel profitable trades of those which they suspect in this kind of ‘Hedging’ as their dealing room can often see this from the back end system.. I guess that if a broker thinks that this is exposing them, they will cover themselves.
Andy – It could be deemed arbitrage and i have known market makers cancel profitable trades of those which they suspect in this kind of ‘Hedging’ as their dealing room can often see this from the back end system.. I guess that if a broker thinks that this is exposing them, they will cover themselves.
@James – they put out a lot of these warnings, especially the BC regulators http://www.bcsc.bc.ca/caution.aspx . Pretty much everyone is on that list, EZTrader is the newest broker added. But they do little to block them. The usual practices are to target IBs that send clients to unregulated brokers. That is what South Africa’s FSB did. They can also block IPs. At this point it seems they are sticking with continued warnings.
@James – they put out a lot of these warnings, especially the BC regulators http://www.bcsc.bc.ca/caution.aspx . Pretty much everyone is on that list, EZTrader is the newest broker added. But they do little to block them. The usual practices are to target IBs that send clients to unregulated brokers. That is what South Africa’s FSB did. They can also block IPs. At this point it seems they are sticking with continued warnings.