Gain Capital officially launched its 24-hour online FX trading service on 31 May, reports CEO and founder Mark Galant. The service, which is aimed at small- to mid-sized corporates and hedge funds, has attracted much higher volumes than were originally expected, he adds.
Galant says client interest has come from institutional clients and small hedge funds, but a surprising number of individual traders have come online to form the bulk of the demo requests. He adds that users are geographically dispersed, with about a third each coming from the US, Asia and Europe.
“We have had many more demos than we anticipated at this stage, and a few customers are already trading 30-40 times a day with real money,” says Galant. “The next step is to convert these large numbers of demos into real money customers.”
Gain is currently trading spot yen, sterling, euro and Swiss against the dollar and executes deals of $100,000 to $10 million. Galant says forwards and true delivery trading will be added in upcoming months, as will more currency pairs. He says that either the major euro crosses or the Commonwealth currencies will be the next added to the system.
“We assumed euro/dollar or dollar/yen would be our most active currency pairs, but we’re doing a lot more dollar/Swiss than we imagined, probably because of our 5 pip spreads,” he says, “So client demand will determine which currencies we add next.”
Gain acts as market maker to its customers, quoting a 5 pip spread at all times, to circumvent charging fees or commissions. Gain started with two teams of four dealers, but has now moved to a three-shift environment with the recent hire of four traders to cover the night shift.
Galant says that the group has reached its optimum staffing levels in terms of traders, back office and customer service for the time being; however, he is still keen to make a few more hires in the IT department.
“We have great technology that’s very user friendly. Customer feedback has been very positive, which explains the high volumes we’ve seen,” he says. “Now we want to broaden the products that people can trade over the next several months.”