“(Prop trading) value proposition to the client is such that this has attracted a large number of users who never considered FX and CFD trading before” Drew Niv, the Chief Strategy Officer at ATFX Connect, shared when asked whether prop trading is good for the industry.

Speaking to Jonathan Fine, Content Strategist at Ultimate Group, Niv, a long-time industry expert, defended proprietary trading as a force for market expansion, even as he warned brokers to brace for a looming wave of competition from neobanks and fintech giants.

He admitted that prop trading remains “mathematically unsound” in many of its current forms, yet argued it has become a crucial gateway for new entrants into the online trading world.

The Prop Trading Paradox

ATFX is a global online forex and CFD broker that offers trading in currencies, indices, commodities, shares, and cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term via the MetaTrader 4/5 platforms and its institutional ATFX Connect offering. The broker operates under the “ATFX” co-brand across multiple regulated entities, including AT Global Markets (UK) Ltd.

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Niv acknowledged the model’s flaws, high churn rates, inconsistent performance metrics, and patchy risk controls, but sees gradual maturation. Early prop challenges, he explained, were driven “99.99% by luck,” yet are now evolving toward more realistic trading conditions and skill-based evaluation.

“But the problem was that initially the qualifying rules of ‘you won and you qualify for a quote unquote real account.’ Those rules were too loose,” he added. “And people essentially won by a lot. They're still too loose, but they're getting tighter. The leverage restrictions are getting more.”

He likened today’s prop trading phase to the “wild west” period preceding the rise of regulated retail FX two decades ago. The end result, he suggested, will again be positive: “Just as retail FX expanded the market 25 years ago, prop trading will bring in a fresh generation of traders.”

Neobanks and the Threat of Scale

Niv struck a more cautionary tone when the conversation shifted to neobanks like Revolut and Monzo entering the trading arena. Drawing on FXCM’s experience in Japan, where internet conglomerates like Rakuten and GMO wiped out hundreds of brokers, he warned that the same dynamic could now play out in Europe.

“And what happened around those years is that the large, essentially the Rakuten, which is like the Amazon of Japan, GMO. So you look at all these Internet giants who had an endless amount of inventory from online advertising, all of the stuff that they do. And a user base,” he pointed out.

“And therefore, they had a user base and a massive brand. And their cost of acquisition was tiny. And they had to essentially say, oh, if you open an account with us, you know, like Rakuten is a good example,” he shared.

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Niv argued that brokers face a choice: specialize regionally, expand into multi-asset Multi-Asset Composed of varying asset classes, multi-asset is a blanket designation combining different classes such bonds, equities, cash equivalents, fixed income, and alternative investments.When compared to traditional balanced funds, multi-asset solutions differ because they target specific investment outcomes. This includes outcomes such as return above inflation as opposed to gauging performance against standardized benchmarks.Given the composition of multi-asset classes, they need to be dynamically Composed of varying asset classes, multi-asset is a blanket designation combining different classes such bonds, equities, cash equivalents, fixed income, and alternative investments.When compared to traditional balanced funds, multi-asset solutions differ because they target specific investment outcomes. This includes outcomes such as return above inflation as opposed to gauging performance against standardized benchmarks.Given the composition of multi-asset classes, they need to be dynamically Read this Term offerings, or risk being outspent.

“Most FX and CFD brokers are self-funded,” he observed. “They make some money, they keep it. They don't need external investors until IPO, but until really when you have to compete on a much grander scale, and you're going to need a much larger scale.”

“These firms have the advantages that when they're not profitable, they can easily raise money and large sums of money in bulk,” he added. “Because they do not have the earnings volatility of a B-book pure shop.”

Shifting Geographies and New Frontiers

The conversation also touched on emerging markets, which Niv described as “where the action is shifting.” Once overlooked, he said regions like Southeast Asia, Africa, and the Levant now boast real wealth and rising trading participation.

“Who would have thought 15 years ago Africa would be a hot market? Who would have thought, you know, outside of South Africa, which always was. But the other countries were definitely not,” he pointed out.

“Who would have thought that sort of the non-GCC Middle East would be a hot market. Jordan, all these places. ATFX is the second largest office, if I'm not mistaken. So that 15 years ago, you'd call me crazy. It never would have happened,” he emphasized. “Today, it's a real place with real income, with real, you know, wealth.”

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Niv predicted that global financial “supermarkets” would eventually buy their way into these growth regions. “It’s not happening tomorrow, but sooner than most people think,” he warned. “Look at Kraken acquiring NinjaTrader – if that weren’t an American firm, its first target would’ve been one of the top 10 FX brokers.”

Industry Reflections: Convergence and Focus

Reflecting on the broader discussions at the summit, Niv said the line between institutional and retail trading remains less blurred than some suggest, though convergence is clearly accelerating. What he values most, he added, is perspective.

“I was not of the opinion, given my experience, that the retail industry and institutional business is converging,” he explained. “I think other people's experience is definitely different. But I think that's something that that would be a cool debate.”

“I think that's something that is a very big deal.” When asked whether he expected to win his upcoming debate on whether prop trading is good for the industry, Niv laughed: “I rigged it – I picked the favorable side. It’s a biased room.”