Fazzaco Weekly Digest: Challenge Costs of Major Prop Firms; Bankruptcy of FlowBank; B2Prime and Spotware Join Forces
The prop trading industry has witnessed a surge in participants, with Trade.com, a multi-asset brokerage brand, recently introducing its prop trading services through its Cyprus unit.
Given the inherent risks in trading, what are the necessary 'costs' that prop firms and traders need to consider? Fazzaco offers valuable insights by comparing the "challenge costs" of six prominent prop companies.
The recent bankruptcy of Swiss online bank FlowBank has sparked intense debates in the industry. Furthermore, the collaboration between industry behemoths B2Prime and Spotware has had a significant impact on market liquidity development.
Moreover, there have been changes in the senior leadership teams of various financial services organizations, such as Exinity, ATFX, Simplex Trading, CPT Markets, and Broadridge.
Here are some of the most read forex, crypto, fintech, and prop trading news pieces and articles from Fazzaco over the last week.
1. Challenge Costs of Major Prop Firms Explained
One of the reasons why prop trading is so widely embraced among retail traders is the fact that not every one is able to afford to trade big in the market, and many of them trade as a means to earn a living. With prop firms' funds, these people can easily access the market with their expertise to generate profits without shouldering the financial risks associated with trades.
Prop firms are no philantropists for sure. Usually, traders have to pay a fee to take up a "challenge" in which they will be assigned with a demo account to trade, enabling firms to evaluate traders' capabilities. Only those who achieve the set profit targets are eligible to upgrade themselves to funded traders. Hence, the "challenge" acts as a risk control for prop firms. Today, we'll delve into how prop firms employ the "challenge" to manage risk, the potential for scams, and contrast the "challenge" costs across six prominent prop firms.
2. Exinity Onboards Andrew Speakman as Senior VP - Business Development
Hantec Markets alum Andrew Speakman has joined Exinity, a retail Forex brokerage firm which owns Alpari and FXTM brands, as Senior VP - Business Development, out of Dubai, according to his latest LinkedIn post.
Prior to Exinity, Andrew dedicated more than twelve years to Hantec Markets, a market leader in Forex trading services, based on his LinkedIn profile. He initially served the broker as Client Liaison Officer, then rose to Institutional FX Sales Manager. Most recently, he was Sales Director of Hantec Markets.
3. Trade.com Rolls out Prop Trading Under a Cyprus-Based Entity
Fazzaco learned that Trade.com, the multi asset brokerage brand operated by Trade Capital Holding, has introduced prop trading services under the brand Trading.com Challenges. The broker has joined the ranks of IC Markets, Traders Trust, etc.
According to the Trade.com Challenge website, the prop trading service is offered by Tplus Technologies Limited, a corporation registered in Cyprus and different from Trade Capital Markets (TCM) Ltd, the Cyprus-licensed entity that runs the Trade.com brand in the EU region.
4. FlowBank's Downfall: Bankruptcy Proceedings Triggered by FINMA
The Swiss Financial Market Supervisory Authority FINMA issued an announcement on Thursday (June 13) announcing the closure of the local online bank FlowBank and the initiation of bankruptcy proceedings against it.
FINMA confirmed that FlowBank SA "no longer has sufficient capital for its operations as a bank" and has seriously violated the minimum capital requirements it should always meet. Additionally, there are "well-founded concerns that the bank is currently over-indebted". FINMA stated that "as there is no prospect of a restructuring, the bank must be wound up".
The US Commodity Futures Trading Commission (CFTC) has released its latest monthly report, which shows that retail forex funds in April 2024 stopped increasing, with the total volumes of six institutions dropping a slight 0.30% M-o-M.
The report covers registered retail foreign exchange dealers (RFEDs) and broker-dealers operating in the US. These include CHARLES SCHWAB Futures & Forex LLC, Gain Capital Group LLC, IG US LLC, Interactive Brokers LLC, OANDA Corporation, and Trading.com Markets.
6. B2Prime, Spotware Join Forces to Expand Liquidity Options
B2Prime, the world's leading multi-asset PoP liquidity provider for institutional and professional clients across the spectrum of financial markets, has recently announced a strategic collaboration with Spotware Systems (Spotware), the esteemed developer behind the renowned cTrader multi-asset trading platform.
Currently, B2Prime boasts seamless integration with several prominent platforms, including OneZero Hub, PrimeXM XCORE, and FIX API Trading. Leveraging this new partnership, B2Prime has incorporated Spotware's cTrader into its array of platform options, thereby enriching customers' liquidity choices and elevating their trading journey. Concurrently, B2Prime, hosting a diverse portfolio featuring over 200 instruments across various assets, has bolstered cTrader's liquidity offerings, consequently amplifying the platform's industry competitiveness.
7. Crypto.com Secures Virtual Asset Service Provider Registration in Ireland
After obtaining full approval from Dubai's Virtual Assets Regulatory Authority (VARA), Crypto.com, a leading cryptocurrency exchange, announced on Tuesday (June 11) that it has secured approval as a Virtual Asset Service Provider (VASP) from the Central Bank of Ireland following a thorough review.
The new approval allows Crypto.com to extend its services in Ireland, including crypto-to-fiat exchanges and fiat wallets.
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