Finance Magnates spoke with Sudhanshu Agarwal, the Global CEO of Tickmill for his in-depth look into the company’s new CFD offering and market ambitions in 2015. His full-length interview can be read below.
1. What was the rational behind expanding into CFDs at Tickmill? Has there been a lot of client interest?
To be honest I have worked with a lot of firms where we received a healthy dose of feedback, ultimately brushed aside by management. Hence, acting on feedback was one of the mandates I felt we should do something about. With the feedback we were receiving it became clear that many of our clients were crying out for contracts for difference (CFDs).
As a company, we want to ultimately manage expectations and give our clients something good in terms of their trading experience. The client feedback was the thus the instrumental factor that provided the impetus to get into the CFD market.
It takes patience to listen when your clients globally state that they want something, we heard them and acted accordingly.
2. How did Tickmill settle on the eight selected CFDs and do you foresee expanding this list in the near future?
First and foremost this is the initial tranche of CFDs and we will be certainly expanding in the future. Again, feedback came into play, as we get more perspective from our clients – we will continue to deliver on what they require within reason.
However, in terms of selecting the initial offering of eight CFDs, it was fairly simple. We considered the ones most requested and most liquid, purely because liquidity helps. We allow our traders to implement all of their respective strategies and we need liquidity in the marketplace or else it won’t be competitive or conducive to trading strategies utilized by our clients.
Moreover, this would defeat the purpose of adding these instruments in the first place. These are the two main factors we are looking at, whether it is liquid enough and what our clients ultimately want.
3. How do you get the feedback from your clients?
There are different ways for clients to give us feedback, i.e. they write to us and we approach them as well with questions about our service and how we can improve. This is a collective effort and the two approaches work in tandem with one another.
At Tickmill, one of the cultures I wanted to create is that of being a company with a client focus. The only way we can utilize such an approach is if you are in constant touch with your clients. Not just being in touch for sake of it but listening to what they have to say.
4. What types of clients and from what regions in particular are you hoping to secure with the CFD offering?
This comes back to the type of clients. The majority of our clients from what I can see are professional traders who understand value and great trading conditions with no restrictions. When you look at the CFD trader however, they have experience in trading the underlying market so they tend to gravitate to us given we impose no restrictions and this makes it easier for them.
Visible Supply's Role When the Futures Contract Finally ArrivesGo to article >>
Alternatively, the beginners who are looking to diversity their existing portfolios go on to blogs and forums and search for a reliable broker. This is where we have been fairly strong in our efforts and the feedback has been very positive. Our clients are helping us via word of mouth.
In terms of a concentration of clients, there is not a real region as such per say, however we have been making inroads in most markets. I think Africa has a wealth of untapped traders in particular and we are hoping that clients looking for an honest and reliable broker will flow from all regions.
5. Can you describe any future plans or goals the company has for 2015?
Our main goal is to expand geographically and achieve market penetration in a number of locales – starting with African nations and there has not been as much focus by our competitors in the region. The fact we are licensed in Seychelles gives us an advantage geographically in terms of the MENA and Asian markets. We also plan to get licenses in multiple jurisdictions and have internal goals and targets. We also want to build a brand that everyone recognizes as an industry leader who is honest and reliable.
Obviously improving our service and product offerings is another major aim of ours as well and that has not changed since day one.
We are working on a loyalty program to reward our clients for trading with us and for the feedback. It is coming soon and it will change the way we do business with clients, and we expect to launch it this year.
6. Why is Africa not a targeted locale for other companies?
Over the years, Africa has lagged behind the rest of the developed world in terms of ready access to the internet. This could be one of the reasons why it has not been targeted by other companies. This situation has changed dramatically over the last couple of years and this creates an opportunity for us.
Further, the region has been plagued by potential scam which has eroded its reputation, but that was also the case of China in the past and now everyone is in or wants to be in China. I believe Africa will also shine through.
7. Shifting course to FX, how did January’s CHF volatility affect Tickmill?
To be honest we were not really affected as we saw the writing on the wall before it happened. We had reduced leverage even before anything could have happened with the CHF issue. The effect was that some clients left us before the event even occurred, given they were disgruntled about leverage reductions.
After the event however, we regained some clients lost via attrition. Through the whole event, we continued to stay on the side of our clients by not issuing any requotes or cancelling any profits. We in fact covered any negative balances that arose. However, thanks to the efforts of all the staff, all our clients and us pretty much walked away unscathed.
8. Tickmill recently lowered the leverage for exotic currency pairs. Do you view this as a capable buffer against heightened volatility?
Yes certainly, the fact is that with leverage many individuals are used to trading with high leverage and if you suddenly reduce it then they effectively have only two options. One is to shy away from us or reduce their own exposure. We are hoping that reducing their exposure is the option they take, which is what helped us during January 15.
Over time we hope traders will realize that with these exotic pairs that reducing leverage is the only way we can reasonably protect them, forcing them to reduce their exposure in line with their own capital with us because the last thing we want to see is a trader losing money with us.