GAIN Capital is the latest entrant in the race to offer online FX trading services – but hopes to set itself apart by offering real-time, two-way prices on a 24-hour basis with a team of professional Wall Street traders making markets to customers from next month.
The New Jersey-based firm is being spearheaded by Mark Galant, most recently vice chairman of the trading and risk management systems company FNX Ltd. For the three years prior to joining FNX in 1994, Galant ran global currency options for Credit Suisse, and before that, he ran the currency options desk at the old Chemical Bank. He also spent time as a money manager at Tudor Investment Corp, and got his start as a floor trader on the New York exchanges.
“Recently, a number of smaller firms have begun offering online FX trading in an effort to change the complexion of the industry by offering interbank spreads to small and mid-sized investors including hedge funds, CTAs, money managers, corporate treasurers and private investors. What we offer is a sophisticated and professional service, backed by an experienced team of market professionals who can assure security and sound dealing practices,” says CEO Galant.
GAIN is currently preparing its Web site, www.gaincapital.com for trading to begin in March. GAIN is initially hiring two, four-strong teams of traders to operate a 24-hour market making desk in six major spot currencies. Within a few months of launch, GAIN will expand by adding a third shift of four traders, and extend the service to cover cross currencies, followed shortly by forwards. Galant says he plans to eventually add more sophisticated products, such as options, to the service.
“One of the key things we are focusing on is the real-time aspect,” says Galant. “We will give investors the ability to see real-time, two-way prices that they can deal on instantaneously, as opposed to having to request a price.”
GAIN is targeting the service at hedge funds and CTAs trading a minimum $100,000 deal size. GAIN charges no commissions or fees, just a five-point spread (or less depending on the currency and activity). Investors post margin with GAIN, which is leveraged at 50:1.
“The firm will execute FX trades of all sizes, and for the first time, investors will have the ability to conduct transactions of between $100,000 and $10 million at the same prices the interbank market typically offers only for multi-million dollar trades,” says Galant. “We’ve already spoken with a number of large banks and investment banks that are happy to provide us with liquidity.”
GAIN is currently in talks with market data vendors to provide news, research, charting and profit/loss analysis. GAIN will also offer position-keeping services, whereby investors can view their P/L and margin in real-time. In addition to the latest encryption software, GAIN is seeking Federal Deposit Insurance Corp (FDIC) insurance to protect its investors.
“The world is undergoing a phenomenal paradigm shift into e-commerce. The Internet FX industry is going to experience the same explosive growth that the equity brokerage business did three or four years ago,” says Galant.
GAIN recently received a $2.5 million investment by Cross Atlantic Technology Fund ( ( the lead investor in a fully subscribed $5 million first round). Cross Atlantic is a $150 million venture capital fund focused on IT investments in the US, UK and Ireland.