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Because the UK spread betting market is already fairly crowded, it takes a firm that can offer something very innovative to make inroads amongst both novice and experienced traders. Tradenext believes it has that formula. The firm’s venture into financial spread betting is part and parcel of a series of initiatives that leverage off technological innovation to bring superior financial services to the retail public.

The owners of Tradenext Limited have their roots in delivering trading facilities to emerging markets, in particular India, where one of their companies is a member of the MCX commodities exchange. Its founder, Mohsin Jameel, recognised that to make waves in the UK spread betting market, Tradenext would need to do more than compete on spreads or customer service. It was also obvious that the ‘me too’ approach of simply offering the MT4 platform and margined Forex trading would make little impact.

Tradenext received its FSA authorisation in January 2012, and has been offering FX and CFD trading facilities via its iTrader platform, which augments the MT4 technology. Apart from currency markets, it has also been offering traders commodities and indices. In India, it has been a key mover in the roll-out of mobile cash facilities, which makes it easier for local traders to manage their online accounts as well as other services. While it may seem strange for a Forex firm to also be involved in retail finance, the interest in this project illustrates how Tradenext’s founders see themselves; leapfrogging ahead of the established players in a market by using technology. In India, for example, mobile cash transactions which leverage off the nation’s growing mobile phone network have allowed it to provide a convenient alternative to the stately banking infrastructure.

In the UK, Tradenext’s culture of innovation has seen it turn to the application server model, signing a partnership deal which will allow it to offer traders a menu of services that they can pick from to build a customised interface. Mr Jameel is aware that private clients in the UK are now presented with enormous choice in the supermarket, on television or from the likes of the Apple app store. Why should they not have the same experience for their trading?

Partnership with Tradable

Tradenext has just announced it is partnering up with Tradable, to offer its apps-based approach to trading which, Mr Jameel argues, “will change the face of both FX and CFD trading.” Tradable was founded by Danish entrepreneur Jannick Malling to provide generic trading technology that would allow others to create apps for traders, rather than simply presenting a ‘locked down’ interface.

The partnership between Tradable and Tradenext was officially launched at this month’s London Investor Show. Such a multi-faceted approach to delivering a trading experience – for example, by letting customers pick the news they wish to receive – also allows Tradenext to become more responsive to customer demands.

The applications are obvious for traders. It makes it easier for traders to test out expert advisors, but while the initial range of apps might be limited, it is not hard to see how a broad universe of choice could soon be made available. Data and charting applications are just the most obvious tools.

“Tradable bridges the traditional and emerging markets and has the potential to really improve the sociability of the market,” says Mr Jameel. “When we heard about Tradable in July 2012, we knew that it was something that we wanted to be a part of.”

Emerging markets expertise

Product innovation in the trading space is not as widespread as it ought to be, leaving scope for new market entrants to become the go-to experts for emerging trading markets. Jameel rightly identifies emerging markets currencies like the Indian rupee [INR] or China’s RMB as offering enormous potential for both spread betting and CFD sectors.

“We’re seeing a lot of traders who have experience of these currencies but can’t trade them locally or don’t get the service or level of sophistication they need from local brokers, seeking someone who can deliver what they need,” says Jameel.

Brokers in Asia are seizing the initiative by offering emerging markets currency trading at a time when European brokers are seeing little volume through the ILS or TRY and are worrying about declining volumes in mainstream currencies like the GBP or EUR. Growth in intra-Asian trade, plus an appetite for instruments and markets outside of Asian regional stock  indices, like the Sensex or Shanghai Composite, means there is an opportunity here for brokers to position themselves for a new wave of investors.

The tie-up between Tradenext and Tradable places a large marker down in the UK domestic trading market. We look forward to seeing what comes next.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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