Prop Trading Craze: Devexperts “Signed and Launched a Dozen Firms in 5 Days”

Following the recent alleged crackdown of MetaQuotes on prop trading firms, Devexperts’ DXtrade platform has emerged as a winner. Many prop trading firms, big and small, have integrated DXtrade to replace the forceful elimination of MetaTrader platforms.

“We have seen a large increase in inquiries and new clients signing with us. Our deployments are largely automated, and we are a large company with the bandwidth to cater to all our clients' requests,” Jon Light, the Head of OTC Platform at Devexperts, told Finance Magnates, adding that these last few days were “very hectic.”

“Despite our established processes, we were at our capacity and set a few internal records, signing and launching a dozen companies within the last five business days.”

The End of MetaTrader for Prop Trading

The chaos in the prop trading industry started in early February when multiple brokerages, including Purple Trading, Eightcap, and Blackbull Markets, decided to end grey-labeling their MetaTrader licenses to prop trading firms. An executive at Blackbull Markets confirmed to Finance Magnates that the move was forced by MetaQuotes, the developer of two MetaTrader platforms; otherwise, the broker would risk losing its MetaTrader license.

Although MetaQuotes did not confirm anything officially, the company allegedly did not want the unlicensed prop firms offering MetaTrader platforms to US customers. An unverified email by a MetaQuotes representative showed that the company needs firms to have either FINRA or NFA registrations even for offering MetaQuotes for educational purposes.

The brokerages now offering services to prop trading restricted their services only to non-US customers.

“As a provider that has been the first choice for business-critical software for many years, it would be reasonable to expect MQ to communicate clearly, perhaps through a press conference or an official statement, to set clear expectations,” Light added.

He further highlighted that “the platform providers, not revolving around MQ, were presented with great opportunities.”

Boom for MetaTrader Alternatives

The US was one of the largest markets for many prop trading firms. The sudden alleged crackdown has left them with no choice but to hastily look for alternatives, like DXtrade, cTrader, Match-Trade, and a few more.

“We already had a large number of prop firms using DXtrade and had many more that we were speaking with. In the past few weeks, new inquiries have obviously increased. We are speaking with most firms in the industry as DXtrade is becoming one of the go-to platforms,” Light said.

“We received more than a thousand platform demo requests over the last weekend. I’d say there are tens of qualified leads every week.”

He further pointed out that “prop trading firms are not new to DXtrade” as the company has “a number on-boarded already, and multiple prop-tech-oriented technology partners that have integrated” its trading platform.

“With the large props moving to DXtrade, we are seeing a lot of requests for migrating users from their existing platforms. We don't normally hear this request as brokers normally add DXtrade in parallel, but we are willing to help.”

Bringing Prop Trading-Specific Features

MetaTrader 4 was initially released in 2005, and its interface is now dated based on current standards. MetaQuotes is now pushing brokers to adopt MetaTrader 5, the successor to its original platform.

Now, Devexperts is targeting companies with a “very professional-looking interface.” Light highlighted that DXtrade offers “a performance dashboard, a trading journal, and a super-responsive charting widget.”

“These tools provide a feeling of a professional trading environment, which is desirable for prop firms. We also give companies the ability to add the TradingView charting library so clients can experience TVs charts and interface inside DXtrade. It’s an open platform with multiple options for CRMs and Prop Trade Tech solutions.”

“We have also implemented prop-specific risk parameters directly into the risk engines, such as Max Drawdowns and Target Limits. This means they are checked and instantly acted upon, rather than an external service going through an API.”

Due Diligence Is Necessary

Devexperts’ DXtrade is a “neutral technology provider and does not partake in any trading or investment activities.”

“The responsibility of onboarding and servicing end traders, as well as ensuring regulatory compliance, sits with our clients,” Light added. However, the company thoroughly checks on its prop trading clients.

“DXtrade carries out a detailed KYC, and we have enhanced this process to make sure that we are only onboarding reputable clients. We had recently added more staff onto this team, which is holding personalized training programs for our new clients to help them get up and running very quickly,” he said.

“[The process involves] from receiving the information on everything about the company and spans to our internal screening. Our KYC process was developed and refined throughout our business operations.”

“Outlined in our contract, we emphasize the importance of our clients adhering to all local laws and regulations governing their respective regions; the allocation of responsibility is on them as the broker or other types of market maker. We strongly advise seeking local legal opinion to ensure compliance with proposed business activities.”

“Additionally, our commitment to maintaining a secure and ethical trading environment is unwavering. We reserve the right to promptly suspend and terminate our clients' accounts found engaging in fraudulent activities or in breach of local rules. Furthermore, we actively monitor public regulatory lists to ensure compliance with industry standards.”

The Future of Prop Trading

Prop trading is currently an unregulated industry. The companies do not handle customers’ funds for trading, so the existing brokerage regulations do not apply to them.

Light believes the prop trading industry “will move into the regulated route.”

“This is a new disruptive area of fintech, and there are obviously clients that want this service. As an industry, we need to ensure there are no bad actors, the rules and risks are clear, the outcomes are clear, and the props execute on their obligations to their clients.”