Marking our inaugural edition of our biweekly Executive Interview column, Forex Magnates met with David Cooney, CEO of MahiFX. What attracted us to learn more about the ASIC Licensed MahiFX is that they took a totally different approach when launching the broker last year. In a period when many brokers are switching to STP models, or at least claiming as much, MahiFX has gone the route of operating as a market maker. They also don’t try to hide this fact and contrary to industry norms market themselves as market makers and explain the benefits it provides to clients. In addition, while most new firms launch with a third party platform such as MT4, MahiFX built and provides their own proprietary platform for clients. With that background, we wanted to know what drove Cooney and his team to apply such a different approach with their new firm.
FM: Working in FX options, how did you arrive in the OTC space?
DC: In 1994 I began working as a FX options trader and in 2004 moved to Barclays to work on their options desk. Having the experience as an options market maker, I was brought in to help with Barclay’s eFX offering. At Barclays we applied the risk management solutions we were using for options and applied them to eFX. With eFX, the more confidence you have in how you create your spreads allows you to offer better spreads to clients. Having a strong understanding of risk leads to greater confidence in your spreads. At MahiFX we wanted to apply the same risk principles we used in creating institutional pricing and provide that to retail traders.
FM: Do you provide different pricing for different types of clients and size of accounts, similar to what a bank like Barclays does with its relationship pricing?
DC: No. We want to bring retail clients onto an institutional like trading environment, with the same rates to all clients. If we believe we can improve rates, we will improve it for everybody.
FM: About the platform, why build your own proprietary platform instead of use a third party solution?
DC: Our extensive experience in the institutional space affords us invaluable insight into what exacting traders require and expect from a platform. This differentiates MahiFX in the retail sector. With this technological insight and expertise we have been able to engineer every aspect of the user experience to reflect what traders of all levels of sophistication would wish for in a platform, from first engagement with the platform through to where risk is processed. And by owning the technology, we are able to continually customise and evolve the platform based on client feedback, requirements and wish-lists.
FM: Since your launch, the platform has experienced many updates, how do you decide what to change and add?
DC: By owning the platform, we have good insight in what traders want. Therefore, we look at the requests we receive and evaluate the demand and priority for each requests. We also look at how long it will take to apply a change and the impact it is expected to provide for clients. That analysis provides us a list of changes ranked by priority for us to work on.
FM: The marketing of MahiFX as a market maker goes against the current market trends, why did you decide to go in this direction and how is it being received to clients? What does MahiFX answer customers that ask about the conflict of interest?
DC: The market making and broker models continue to co-exist. As market makers we aggregate and manage the risk, which translates into faster execution and tighter spreads for our retail clients; on par with what is available to institutional traders.
While we can’t voice an opinion on other firms, the supposed ‘conflict of interest’ myth around the market making model is one that MahiFX is able to dispel. We operate in an entirely fair and transparent manner. Also, with our spreads there are no commissions or hidden spreads.
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What is imperative for traders to remember is that everyone trades with a market maker. Even those brokers calling themselves an agent are providing the price of a market maker with a mark-up.
Our technology has no human intervention. For retail traders clicking on a rate, this leads to extremely high fills rates. As market makers, as long as we say that we made a good estimate of what the spreads are, we know that some trades work for us and others work against us.
FM: Moving back to the platform, are there any plans to adopt 3rd party platforms?
DC: Our focus is on continual innovation and evolving our proprietary technology in anticipation of and in response to client feedback.
FM: What updates does MahiFX have planned for the platform?
DC: Since launching in February 2012 we have introduced a raft of platform and service enhancements. We have launched new charting packages, the facility to trade gold and silver, new book and trade views, an interactive MahiFX Currency Converter too, customisable Trading and Price Alert notification features, and a social sharing function that gives traders the ability to share their trades direct to facebook along with screenshots of their charts and commentary. As we built the platform ourselves we have the distinct advantage of being able to incorporate client requests with very quick turnarounds.
Currently, we have we have numerous developments in the pipeline, including the launch of mobile trading on iOS and Android devices. Mobile is the next big thing.
FM: Can you shed some light on details of your client base, such as numbers, daily trade volume, and what are your biggest regions?
DC: MahiFX has a growing global client base in both established and emerging FX markets. As we have been focusing on developing our platform we feel it would be premature for us to publicise milestones.
FM: With the tight spreads, do you provide partnership or introducing broker programs?
DC: We don’t work with introducers as this time. What we are planning on launching is a Refer a Friend program .
FM: Over your long career, what are characteristics that you have seen in successful traders that you believe are important for forex traders to adopt?
DC: Successful traders across both institutional and retail sectors do share certain characteristics. These include an understanding of the markets, employing sound trading strategies, having diversified portfolios and a solid approach to risk management.