London-based CFD provider Infinox has become the first UK company to make forex futures trading possible in South America. The global trading platform has been selected by the Brasil Bolsa Balcão stock exchange – known as the B3 – to be the sole market maker for FX futures trading contracts.
The appointment means that Brazilian investors in the B3 – the world’s third largest derivatives exchange by volume in 2019 – can now trade the world’s most liquid FX and interest rate products in their home market, and without needing to send funds out of the country.
The simplicity and liquidity of FX derivatives means they are hugely popular – an estimated $6tn are traded worldwide per day – but the CFD sector in the UK and the US has recently come under pressure through greater regulatory intervention and leverage caps.
However Infinox’s decade of success in its home market has given it substantial liquidity, which it is now using to pivot part of the business into a market maker role in Brazil’s exciting and untapped market.
The B3 – based in Brazil’s financial capital São Paulo – is the country’s second oldest exchange and has a market capitalisation of more than £500bn. It is now the first bourse in South America to offer FX futures, and Infinox will also be making a market for US Treasury futures which are already actively traded in the country.
Demand from retail investors in Brazil is booming, having grown 60-fold in the past three years. Infinox will spend the next few months measuring demand from institutional investors, banks and brokers for futures contracts, which will include Dollar crosses such as the GBPUSD, EURUSD, AUDUSD, NZDUSD, USDCAD and USDJPY as well as Scandinavian pairs.
Robert Berkeley, CEO of Infinox, said:
“This is totally new and it’s a tremendously exciting partnership. It’s a gamechanger for Brazilian investors, who can now trade forex futures in their home market more easily and effectively. Meanwhile for Infinox, the potential for future collaboration with other international exchanges is hard to overstate. This puts Infinox at the leading edge of the market making industry, and is a bold move we are able to make because of the high levels of liquidity we have access to. The CFD environment in Britain and the US has become more challenging recently, so our diversification into market making is part of our ongoing and ambitious strategy for global growth.”