Hard to imagine that there’s a been a busier retail forex broker out there than ETX Capital, at least looking at the first six months of this year.
And it all seems to have been done as the company continues to grow into one of the leaders in the super-competitive UK online trading market.
We’re pleased to speak today with ETX Capital CEO Andrew Edwards to address directly what is going on at ETX, as well as get his views on how ‘Brexit Friday’ went, what the industry has learned from last year’s Swiss Franc spike, and lots more…
LR: Hi Andrew, and thanks for joining us today. It has been quite an interesting and busy few weeks in the FX trading world. Can you let us know a little about how ETX Capital prepared for the Brexit referendum.
Andrew: Unlike the CHF crisis we had a lot of time to prepare. We gradually raised initial margins ahead of the event and communicated that to all clients. In most cases our clients were equally concerned about the upcoming volatility and agreed with our margin changes. We also ensured that we had sufficient cover over the referendum week in particular around technology, risk and client support. On the night itself we saw volumes up by 10 times normal trading and with the office fully staffed we managed the night very well. Not to mention the many journalists and broadcasters that wanted to film and report from our offices through the night.
LR: How would you compare the activity in the GBP after word broke of the surprise Leave victory, to last year’s CHF action after the surprise Swiss National Bank action. After all, both resulted in a 15-20% spike in the key currency pairs.
Andrew: It was extremely busy but there was a level of expectation and as such there seemed to be a lot of order in the financial community. Although both events resulted in a 15% – 20% moves in some currencies, the GBP crosses were liquid with much tighter spreads than experienced with the CHF.
LR: Do you think that the leveraged trading industry as a whole ‘learned its lesson’ from last year’s CHF spike? Are things done differently now at brokers generally, and at ETX in particular?
Andrew: There is no question the industry was rocked by the CHF event to the extent that we saw two substantial players sustain losses they could not absorb (namely FXCM and Alpari UK). I think some of the brokers offering lowest initial margins have reined in the leverage they offer. ETX and a handful of bigger brokers on the other hand have never competed on margins alone and as a result a few changes have been made but nothing substantial. Amongst some others, ETX has always ensured a good balance between being commercial and treating customers fairly and that has been achieved by offering good pricing, spreads and leverage without putting customers in harm’s way.
LR: How has the first few months been for ETX post rebrand? Have clients been seamlessly moved over to your new platform?
Andrew: Although we rebranded and updated our trading platform and mobile offering, the customer experience is very similar. The rebrand, our acquisition of the Alpari UK customer base, good 2015 numbers and strong and growing international strategy has meant that we are well positioned to grow revenues and profitability. We have just had a record half year and the company continues to go from strength to strength.
LR: You’ve made some big changes in management the past few months. What can we expect from ETX in the coming months?
Andrew: We have strengthened our board with Clare Hafner and Mark Preston joining as new INEDS and we have added Andrew Woolley (CFO) and Arman Tahmassebi (COO) to the executive team. We feel that we have a good management team supported by a strong board with good corporate governance and are well placed to execute on our growth strategy over the next few years.