Established in 2005 in London’s “Square Mile”, ActivTrades is an FSA regulated forex brokerage which has geared its offering very much toward the UK market since its inception. This is apparent in the company’s website wording where “Spread Betting”, a term used in the United Kingdom in order to for traders withdraw their profits without tax liability due to its classification as gambling rather than trading, is prevalent.
The company extended its service to support MetaTrader 5 in March last year, and has enjoyed successful acquisition of clients in Europe recently, including their presence at Germany’s World of Trading Conference. ActivTrades also offers institutional services to portfolio managers and IBs. In this week’s Executive Interview, Forex Magnates discusses the direction of ActivTrades’ corporate strategy with ActivTrades CEO Alex Pusco, who founded the company in 2001 in Switzerland before its relocation to London four years later.
Tell us about your MT5 offering. How has it been in terms of popularity, and what steps have you made to attract new clients to use MT5 when they are familiar with MT4?
We have experienced a great demand for MT5 since it was launched. There are some strong features on MT5 (one click trading, more time-frames on charts) that makes it naturally appealing to MT4 users. Also, we are offering educational resources to help MT4 users change from the MQL4 programming language to MQL5 (used on MT5). Finally, as the trade engine behind MT5 is more powerful than on MT4 we are able to capture better prices from the interbank market, passing the savings on to our clients in the form of lower spreads.
I would like to ask about the World of Trading conference in Frankfurt. I noticed that you had a large profile there. What is the attraction to the German market, and how are you connected to the conference there? The German market is an interesting choice especially considering that most companies are looking at the Far East and emerging markets? Surely Germany is a small and saturated, very conservative market?
We have sponsored the World of Trading conference for many years now; it is one the most sophisticated events in Europe, attracting many retail and institutional individuals who are interested in innovation as well as new technologies.
We see the German market as an extremely important one, as it is the largest in continental Europe, therefore we will continue to treat it accordingly. Nevertheless, we are also looking at other markets including the Far East and emerging countries.
Your classic account has a EUR/USD spread of 1.3 pips, and uses the MT4 platform. However the Advantage account has raw spread and uses MT5. How do you accommodate professional traders and portfolio managers who want to trade raw spread but are not prepared to switch their entire set up to MT5? Is this a sector of high net worth professionals that ActivTrades is prepared to miss out on?
We obviously understand that MT5 still has some way to go in terms of attracting clients at the high-end of the market, therefore we have adapted our commercial approach by offering these MT4 users the trading conditions found on MT5.
What is your corporate strategy for remaining profitable while continuing to offer very low spreads? Relying on trading volume is often not enough to turn a good profit.
What to Look for in a Liquidity ProviderGo to article >>
We rely on a strategy based on steady expansion and outstanding customer service. This strategy has worked for us. In 2012, a challenging year for most brokers, our volume continued its steady growth.
Are you a market maker and can you set spreads according to type of client?
Indeed we are market makers. Our spreads are set according to market volumes and volatility.
Is there a demand for white labeling the MT5 offering, and what kind of companies are taking this up, in what regions? Does ActivTrades see itself a technology provider, providing all of the integrated back end, support, CRM and operational facilities for forex companies who want to offer MT5, and if so what is the cost per million to a white label partner?
We have seen some demand for our MT5 white labeling offer recently. We do see ourselves as technology providers, as we are able to provide all the back office resources necessary for Forex companies looking to offer MT5.
There are some fixed technical and maintenance fees; the actual costs will be determined by the volumes traded.
Please tell us a bit about the set up of the company – when it was established, who founded it, if there are any new senior executives joining or planned new products/organizational changes for 2013.
I founded ActivTrades in 2001 in Switzerland and we have been established in London since 2005.
We are a fast growing organisation, constantly releasing new products. Having recently introduced shares from several European countries we are looking to expand this offer to include, amongst others, American stocks.
What would ActivTrades like to achieve in 2013?
We hope 2013 will, in tune with our past, see growth for ActivTrades mainly focused in expansion into new territories.