Under New Management: The Ever Decreasing Circles Of Small-Time M&A Activity

Maintaining market share in an industry increasingly dominated by large conglomerates is becoming a challenge for smaller firms. CTOption has

Establishing a new binary options firm with its own dedicated technology solution is something of a mammoth task these days. Especially in an industry segment which is dominated by four major platform providers, for which the modus operandi is to outsource the brokerage side of the business to a series of brands, which are ever increasing in number.

zacky
Zacky Pickholz,
Former CEO, CTOption

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CTOption is a case in point. The firm was founded in late April this year by ex – ITG Investment Technology Group executive Zacky Pickholz, who sold Polar IO Software Ltd. to technology provider Panda TS in order to establish CTOption as a binary options broker with its own platform technology from the outset.

Just a few months have passed since the establishment of CTOption, and Forex Magnates has been informed that Mr. Pickholz sold the company this month, whilst still in its relative infancy.

CTOptions’ new ownership continues the company’s ethos of technology over sales. Whilst Mr. Pickholz confirmed to Forex Magnates that he has moved on, Mr. Pickholz did not proffer the details of the transaction, citing that “The sale of the business was carried out by a partner rather than myself.”

White Elephant?

With the binary options sector having become increasingly crowded, and the vast majority of today’s existing and new brands opting for platforms from SpotOption, MarketsPulse, TechFinancials and TRADOLOGIC, it is apparent that there is perhaps little room for smaller, innovative firms to offer brokerage services as well as technology under one brand.

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Similarly, with unregulated retail FX firms no longer able to gain the requisite market share, the acquisition of recently established binary options firms such as this may represent either a means of entering a niche market share, or could be considered a white elephant, depending on perspective.

SkyFX and FXTG Sold as Going Concern

Sources close to the transaction has explained to Forex Magnates that Dealserv’s other brands, Cyprus-based SkyFX and the firm’s Australian subsidiary FXTG, have both been sold to UTrade CEO Aviv Talmor, signalling the end of the group’s operations under its original ownership.

Whilst the rapid growth of the binary options sector in such a short period of time has generated something of a proliferation of brands which operate in specific markets, mainly Cyprus and Japan, following the national regulatory authorities of those jurisdictions having recognized binary options as a bona fide financial instrument, for newer entrants to the market, life is not quite so simple.

A matter for consideration is perhaps whether the establishment is sustainable at its current level, with so many similar brands vying for the same market share, or whether the off-exchange binary options industry as a whole will need to follow in the footsteps of the retail FX industry and commence an evolutionary period, thus differentiating one from another, and catering for today’s more informed customer base.

Evolution, however, doesn’t always equal success.

 

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