Finance Magnates examined the zero-fee trading phenomenon, asking new market players for their opinion on the current changes.
The zero-fee trading phenomena took the US industry and investors by storm in 2019. Is there anything that the CFD industry as a whole can learn from it?
We had to wait until the end of 2019 to fully understand what the term "disrupted" means. The last quarter of the year brought a real tsunami to the financial world, particularly the US trading market. The biggest names in the industry, such as Charles Schwab, TD Ameritrade, and Etrade, became involved. Recently, even FXCM presented its own zero-fee stock trading offer. Why did the firm suddenly make such a move? Mostly because of Robinhood, one of the newcomers on the market, that actually disrupted it after entering the scene only a few years earlier.
Who buys into zero-fee trading?
While more than a decade ago, retail Forex trading (and CFD outside the US) brought markets to smaller traders who were willing to trade and take a risk, Robinhood went even further. It managed to capture customers who previously were not interested in stock trading at all and did not want to take any risk.
From what is known, the average age of Robinhood's customers is around 32. Most often, they are first-time investors, drawn to the easy experience of the trading process and low prices. They don't even have to understand charting or operate advanced trading platforms. It is an entirely new category of customer, far less knowledgeable and demanding than FX/CFD traders. They are millennials, looking for simplicity, lack of risk, and low or no costs.
Obviously, young and inexperienced millennial stock investors can be a tasty bite for CFD or spread-betting providers. First of all, they can be onboarded by CFD brokers faster as they already have their most difficult decision on putting capital to risk behind them, especially since the CFD industry offers trading instruments based on shares, which should be already familiar to millennial investors.
Secondly, we can imagine that smaller fintech firms, which will not succeed to the extent they wished, could sell their clients to CFD or FX brokers. Either way, with the zero-fee model disruption, a new wave of potential clients emerged, and that is something traditional OTC brokers should not miss.
To get the full article and the bigger-picture perspective on the zero-fee phenomena, get our latest Quarterly Industry Report.
The zero-fee trading phenomena took the US industry and investors by storm in 2019. Is there anything that the CFD industry as a whole can learn from it?
We had to wait until the end of 2019 to fully understand what the term "disrupted" means. The last quarter of the year brought a real tsunami to the financial world, particularly the US trading market. The biggest names in the industry, such as Charles Schwab, TD Ameritrade, and Etrade, became involved. Recently, even FXCM presented its own zero-fee stock trading offer. Why did the firm suddenly make such a move? Mostly because of Robinhood, one of the newcomers on the market, that actually disrupted it after entering the scene only a few years earlier.
Who buys into zero-fee trading?
While more than a decade ago, retail Forex trading (and CFD outside the US) brought markets to smaller traders who were willing to trade and take a risk, Robinhood went even further. It managed to capture customers who previously were not interested in stock trading at all and did not want to take any risk.
From what is known, the average age of Robinhood's customers is around 32. Most often, they are first-time investors, drawn to the easy experience of the trading process and low prices. They don't even have to understand charting or operate advanced trading platforms. It is an entirely new category of customer, far less knowledgeable and demanding than FX/CFD traders. They are millennials, looking for simplicity, lack of risk, and low or no costs.
Obviously, young and inexperienced millennial stock investors can be a tasty bite for CFD or spread-betting providers. First of all, they can be onboarded by CFD brokers faster as they already have their most difficult decision on putting capital to risk behind them, especially since the CFD industry offers trading instruments based on shares, which should be already familiar to millennial investors.
Secondly, we can imagine that smaller fintech firms, which will not succeed to the extent they wished, could sell their clients to CFD or FX brokers. Either way, with the zero-fee model disruption, a new wave of potential clients emerged, and that is something traditional OTC brokers should not miss.
To get the full article and the bigger-picture perspective on the zero-fee phenomena, get our latest Quarterly Industry Report.
A graduate of the Warsaw School of Economics, Sylwester received an MA specializing in finance and banking. As Finance Magnates' research associate and STA certified analyst, he leaves no stone unturned. Sylwester is the previous minority partner of an NFA registered US forex broker, and since 2003, has participated in many forex projects.
Interactive Brokers Expands Offerings with Daily Options on French Stocks
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
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#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
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Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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