North American retail FX giant FXCM‘s (NYSE:FXCM) intention to launch single share CFDs in Europe has been quietly evident since early 2013 and has resurfaced in all following financial results presentations. The recent publication of the company’s operational and financial metrics for the second quarter of 2014 was no exception, with the broker stating that the soft launch of this type of contract for difference (CFD) in Europe will happen soon.
LeapRate has disovered that the launch of this product will make its foray via FXCM Stock Trading, a trading name of FXCM Securities Limited, regulated in the United Kingdom. The single share CFD offering has emerged in the product lineup on the website of FXCM Stock Trading – the business is promising the opportunity to trade with 1000s of such instruments.
FXCM’s CFDs will be tradable on Phoenix, a relatively new addition to the platform range of FXCM. It allows multi-asset trading, with the focus on institutional customers. Previously, however, when the launch of the platform was pending, FXCM had planned to open it to a wider client base. It may be the case that the introduction of single share CFDs will allow FXCM to do just that and to open Phoenix to investors with smaller portfolios. At this point, the minimum deposit required to open an account for Phoenix is GBP 20,000 or currency equivalent.
The pending launch of single share CFDs comes as FXCM’s CFD business is on the rise. The broker reported a 26% jump in CFD volumes in the second quarter, even a higher rise than the 21% jump seen in the first quarter of 2014. And the company sees further potential in this business, especially as fresh regulations in Europe (the Basel framework) have made CFD business more expensive which would push away smaller players in this segment, leaving room for a group of FXCM’s size and capabilities. On top of this we should not forget that FXCM does not need any substantial corporate restructuring, such as mergers and acquisitions, to boost the CFD business. Obviously, a smart move is on the way.
In March this year the broker made a step in bolstering its CFD variety by introducing Micro CFDs in Australia.