Electronic market maker iSAM Securities launched a new risk-sharing program today (Tuesday) that gives broker clients daily updates on how their trading flow performs, addressing longstanding opacity issues in the sector.

iSAM Securities Debuts Risk-Sharing Program with Daily Performance Tracking

The program, called Parallax, lets brokers earn revenue from their client trading activity without building their own risk management infrastructure. iSAM's trading and quantitative teams developed the system internally, pairing it with the firm's existing institutional pricing technology.

Brokers typically struggle to understand how their trading flow generates returns under traditional risk-sharing arrangements. Many firms keep performance details private, leaving brokers unsure about their earnings potential.

“Many brokers are left in the dark when it comes to how their flow is performing,“ said Chris Twort, iSAM's head of trading. “With Parallax, this is at the forefront of what we do, providing clients with daily visibility of performance, so they always know exactly how much they're earning and why.“

Related: DXtrade Adds Real-Time Risk Analytics For Brokers Through iSAM Partnership

How It Works

The system allows brokers to participate in both profits and losses from internalized trades – transactions handled within iSAM's network rather than sent to external markets. Brokers receive predetermined payout structures based on their flow characteristics and business models.

iSAM combines Parallax with its existing Radar analytics tool, which provides real-time performance data on broker portfolios. The firm processes trades through low-latency execution systems designed to minimize delays that could impact pricing.

Risk-sharing programs have grown popular as brokers seek additional revenue streams beyond traditional commission structures. These arrangements typically involve third-party firms taking on market risk associated with client trades in exchange for a portion of any profits generated.

iSAM made Parallax available globally, with commercial terms varying based on individual broker requirements and trading volumes.

Global Expansion Fuels Innovation

The Parallax launch comes as iSAM accelerates its global expansion strategy across multiple regions. The London-based firm recently moved to a new Hong Kong office under the leadership of Barry Flanigan, who was promoted to Head of Asia Pacific after spending over 15 years with the company.

“This move is a signal of our strong commitment to the region,” Flanigan said about the Hong Kong expansion. “We're continuing to grow the team to ensure we can support clients with the level of service and expertise they deserve.”

The timing isn't coincidental. iSAM's UK unit reported £27 million in turnover for 2024, down from £31.6 million the previous year. However, post-tax profits surged 55% to £9.6 million, suggesting the firm is focusing on higher-margin products like Parallax rather than pure volume growth.

This shift becomes clearer when considering iSAM's recent office openings in Cyprus and Hong Kong, plus new leadership appointments like James Wale's promotion to Head of Leveraged Sales EMEA.