Gain Capital about to launch Gain Securities – its securities brokerage division

Correction: Apparently this division has been operating since as early as 2009 but isn’t heavily marketed as the forex one.

Correction: Apparently this division has been operating since as early as 2009 but isn’t heavily marketed as the forex one. This explains why no one I talked to had knowledge about its existence.

Gain Capital, one of US largest retail forex brokers, is about to launch its securities brokerage division called Gain Securities – www.gainsecurities.com.

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On October 3, 2008, the Company acquired all outstanding common stock of S.L. Bruce Financial Corporation, the parent company of State Discount Brokers, Inc. which is a broker-dealer registered with the Securities and Exchange Commission and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”). The Company subsequently changed the name of State Discount Brokers, Inc. to GAIN Capital Securities, Inc. (“GCSI”). Gain Capital paid about $248,000 for the company.

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It took Gain almost two years but now it’s almost ready to launch its securities offering. This move makes sense but it also doesn’t. Gain will be able to attract new audience by offering them the usual stocks/ETFs/bonds investing coupled with their forex trading. I would say that this is perhaps Gain’s main goal here – attract people to forex trading through securities brokerage offering. On the other hand, Gain will now compete with much more established and far better positioned online brokerages such as Schwab, Fidelity and others. Gain doesn’t really have any advantage over these brokerages and armed with this understanding Gain is trying to compete with them on the pricing level:

I imagine that while securities trading will never become a significant portion of Gain Capital’s income it will help it tap into the forex unaware audience and perhaps attract more forex traders this way.

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