Prop
trading, according to experts gathered at the Finance Magnates London Summit
2023 (FMLS:23), offers technology solutions that allow brokers to gain a
competitive edge in retail trading. For one of the discussion participants,
prop trading is like Uber, but in the world of finance.
Moderated
by Aeby Samuel, the CEO & Founder of FYNXT, the FMLS:23 panel covered
topics ranging from risk management to AI ethics to choosing the right trading
platforms.
Kicking off
the discussion, Samuel posed a question: how can brokers use technology to
improve their risk management and operational efficiency?
Wassim Khateeb
As Wassim Khateeb, the Chief Commercial Officer at FXCUBIC, explained: “Technology allows to calculate very large amount of data to analyze very large amount of data in a short amount of time and reduce the possibility of human errors.”
He gave the
example of algorithms that can analyze trades and route them to different
execution venues based on customized rule sets defined by the broker to manage
risk accordingly.
Christoforos Theodoulou
Christoforos
Theodoulou, the Head of Global Business & Sales at MetaQuotes, expanded on
this point and added that “brokers need to use automated trading systems
to manage their risk.” MetaTrader 5, for example, enables brokers to set
up customized routing rules to handle trades from different types of traders
and strategies, keeping risky trades in-house or sending them to an external
party.
The Uberization of Retail
Trading
Vitaly Kudinov
Vitaly
Kudinov, the SVP of Sales and Business Development at Devexperts, drew an
intriguing comparison between prop trading and Uber’s ubiquitous ride-sharing
service. Just as Uber allows individuals to provide rideshare services by using
someone else’s vehicle, prop trading allows traders to trade financial markets
with a firm’s capital rather than their own.
“Prop
trading, this is like a topic to me. It’s like Uber, but in retail trading,”
Kudinov commented.
In both
cases, there is an intermediary providing the necessary resources to enable the
service, vehicles for Uber and trading capital for prop firms. And, in exchange
for providing these resources, the intermediaries take a cut of the profits.
There’s
also a parallel in the rating and performance systems. With Uber, drivers are
rated by riders and have to maintain good ratings to continue driving.
Similarly, prop firms rate traders based on their profitability and risk
metrics.
“There is a
rating system, so the best performance gets the highest rating and that’s the
popularity growth. We have many, more than 10 prop trading firms, and I feel
like more brokers would like to have this service in addition to their classic
brokerage services,” Kudinov added.
The growth
of prop trading firms offering these services to attract retail traders is
comparable to Uber’s rapid expansion by onboarding drivers. And like Uber, prop
trading opens up opportunities by lowering barriers to entry. Small-scale
traders gain access to institutional-grade platforms and funding with just a
subscription fee.
“It feels
like a subscription model also works here as well. People are ready to pay a
fixed fee just to participate in that very interesting experience,” the SVP of
Sales and Business Development at Devexperts concluded.
Artificial Intelligence
and Machine Learning in Retail Trading
The panel
also discussed the ethical implications of AI and machine learning in retail
trading. As Kudinov explained: “While AI tools like ChatGPT can improve
efficiency, they need an extra layer to ensure security. To do that,
Devexperts, has built a separate AI layer on top of ChatGPT focused on
industry-specific questions so that client data never gets exposed.”
John Murillo
On how
technology can enhance the trading experience, John Murillo, the Chief Dealing
Officer at B2Broker highlighted the importance of workflow optimization
and automation. As he put it, “the more automation you get to achieve, the
more clients you can serve on a timely manner.”
Theodoulou
added that an intuitive, multi-device platform with features like auto account
opening, tutorials, custom programs and communication channels (including
AI-powered chatbots) significantly improves usability.
Discussing
how brokers can leverage AI for competitive advantage, Kudinov explained how
Devexperts allows AI to dynamically group traders based on criteria beyond just
performance, profitability etc. This gives brokers more granular, custom
insights into their risk exposure.
Technology Differentiates,
Not Only Enables
Dinos Michaelides
In choosing
trading platforms, Christoforos Theodoulou and Dinos Michaelides, the Director at
DGM Tech Solutions, highlighted factors like reliability, multi-asset
capabilities, total cost of ownership and meeting current & future needs of
target markets.
“One
important aspect is that the technology being used is tried and tested,
ensuring it’s reliable. Reliability is a very big factor,” Michaelides
commented. “You need to make sure that the technology you introduce is not
going to fail at some critical point, ensuring you’re not just a guinea pig.”
When asked
about their biggest technology investments, the experts highlighted continuity, continuously evolving products based on client feedback and market trends.
Areas of focus included scalability, open API architecture, usability, AI and automation.
In closing,
Samuel reiterated that technology is now a differentiator in the quest for
alpha, not just an enabler, a commitment to pushing the boundaries of
excellence.
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Prop
trading, according to experts gathered at the Finance Magnates London Summit
2023 (FMLS:23), offers technology solutions that allow brokers to gain a
competitive edge in retail trading. For one of the discussion participants,
prop trading is like Uber, but in the world of finance.
Moderated
by Aeby Samuel, the CEO & Founder of FYNXT, the FMLS:23 panel covered
topics ranging from risk management to AI ethics to choosing the right trading
platforms.
Kicking off
the discussion, Samuel posed a question: how can brokers use technology to
improve their risk management and operational efficiency?
Wassim Khateeb
As Wassim Khateeb, the Chief Commercial Officer at FXCUBIC, explained: “Technology allows to calculate very large amount of data to analyze very large amount of data in a short amount of time and reduce the possibility of human errors.”
He gave the
example of algorithms that can analyze trades and route them to different
execution venues based on customized rule sets defined by the broker to manage
risk accordingly.
Christoforos Theodoulou
Christoforos
Theodoulou, the Head of Global Business & Sales at MetaQuotes, expanded on
this point and added that “brokers need to use automated trading systems
to manage their risk.” MetaTrader 5, for example, enables brokers to set
up customized routing rules to handle trades from different types of traders
and strategies, keeping risky trades in-house or sending them to an external
party.
The Uberization of Retail
Trading
Vitaly Kudinov
Vitaly
Kudinov, the SVP of Sales and Business Development at Devexperts, drew an
intriguing comparison between prop trading and Uber’s ubiquitous ride-sharing
service. Just as Uber allows individuals to provide rideshare services by using
someone else’s vehicle, prop trading allows traders to trade financial markets
with a firm’s capital rather than their own.
“Prop
trading, this is like a topic to me. It’s like Uber, but in retail trading,”
Kudinov commented.
In both
cases, there is an intermediary providing the necessary resources to enable the
service, vehicles for Uber and trading capital for prop firms. And, in exchange
for providing these resources, the intermediaries take a cut of the profits.
There’s
also a parallel in the rating and performance systems. With Uber, drivers are
rated by riders and have to maintain good ratings to continue driving.
Similarly, prop firms rate traders based on their profitability and risk
metrics.
“There is a
rating system, so the best performance gets the highest rating and that’s the
popularity growth. We have many, more than 10 prop trading firms, and I feel
like more brokers would like to have this service in addition to their classic
brokerage services,” Kudinov added.
The growth
of prop trading firms offering these services to attract retail traders is
comparable to Uber’s rapid expansion by onboarding drivers. And like Uber, prop
trading opens up opportunities by lowering barriers to entry. Small-scale
traders gain access to institutional-grade platforms and funding with just a
subscription fee.
“It feels
like a subscription model also works here as well. People are ready to pay a
fixed fee just to participate in that very interesting experience,” the SVP of
Sales and Business Development at Devexperts concluded.
Artificial Intelligence
and Machine Learning in Retail Trading
The panel
also discussed the ethical implications of AI and machine learning in retail
trading. As Kudinov explained: “While AI tools like ChatGPT can improve
efficiency, they need an extra layer to ensure security. To do that,
Devexperts, has built a separate AI layer on top of ChatGPT focused on
industry-specific questions so that client data never gets exposed.”
John Murillo
On how
technology can enhance the trading experience, John Murillo, the Chief Dealing
Officer at B2Broker highlighted the importance of workflow optimization
and automation. As he put it, “the more automation you get to achieve, the
more clients you can serve on a timely manner.”
Theodoulou
added that an intuitive, multi-device platform with features like auto account
opening, tutorials, custom programs and communication channels (including
AI-powered chatbots) significantly improves usability.
Discussing
how brokers can leverage AI for competitive advantage, Kudinov explained how
Devexperts allows AI to dynamically group traders based on criteria beyond just
performance, profitability etc. This gives brokers more granular, custom
insights into their risk exposure.
Technology Differentiates,
Not Only Enables
Dinos Michaelides
In choosing
trading platforms, Christoforos Theodoulou and Dinos Michaelides, the Director at
DGM Tech Solutions, highlighted factors like reliability, multi-asset
capabilities, total cost of ownership and meeting current & future needs of
target markets.
“One
important aspect is that the technology being used is tried and tested,
ensuring it’s reliable. Reliability is a very big factor,” Michaelides
commented. “You need to make sure that the technology you introduce is not
going to fail at some critical point, ensuring you’re not just a guinea pig.”
When asked
about their biggest technology investments, the experts highlighted continuity, continuously evolving products based on client feedback and market trends.
Areas of focus included scalability, open API architecture, usability, AI and automation.
In closing,
Samuel reiterated that technology is now a differentiator in the quest for
alpha, not just an enabler, a commitment to pushing the boundaries of
excellence.
Participate in Our Fraud Survey: Your Opinion Matters!
We invite you to participate in our joint survey conducted by FXStreet and Finance Magnates Group, which explores prevalent online financial fraud types, platforms used for fraudulent activities, effectiveness of countermeasures, and challenges faced by companies in tackling such fraud. Your valuable insights will help inform future strategies and resource allocation in combating financial fraud.
Social Media Scams: Help Shape the Fight with Your 2024 Survey Participation.
