Comments on: FX Bridge raises funds, competition in fx software market? http://forexmagnates.com/fx-bridge-raises-funds-competition-in-fx-software-market/ Forex Magnates is the home of the Forex Elite providing up to date industry news coverage, commentary and scoops Sun, 12 Feb 2012 11:10:14 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Michael Greenberg http://forexmagnates.com/fx-bridge-raises-funds-competition-in-fx-software-market/#comment-5087 Michael Greenberg Sat, 27 Feb 2010 09:18:53 +0000 http://forexmagnates.com/?p=2461#comment-5087 it took retail fx about 10 years to reach these volumes, I would imagine it'll take fx options around 5 more years to reach 10% of that for the reasons I mentioned above especially the complexity of the product - there are about a million of fx traders (more or less, certainly not several millions) and most of them are plain gamblers who won't spend even a minute learning about what they are trading, let alone start calculating option prices. and no, i don't think that majority of retail fx traders trade stocks too - most of traders trade only one instrument be that stocks, options, futures or spot fx. It's like the common belief couple of years ago that online gaming and retail fx are similar industries and that online gamblers would easily jump on the fx wagon. the reality was somewhat different. it took retail fx about 10 years to reach these volumes, I would imagine it’ll take fx options around 5 more years to reach 10% of that for the reasons I mentioned above especially the complexity of the product – there are about a million of fx traders (more or less, certainly not several millions) and most of them are plain gamblers who won’t spend even a minute learning about what they are trading, let alone start calculating option prices.

and no, i don’t think that majority of retail fx traders trade stocks too – most of traders trade only one instrument be that stocks, options, futures or spot fx. It’s like the common belief couple of years ago that online gaming and retail fx are similar industries and that online gamblers would easily jump on the fx wagon. the reality was somewhat different.

]]> By: Michael Greenberg http://forexmagnates.com/fx-bridge-raises-funds-competition-in-fx-software-market/#comment-5086 Michael Greenberg Sat, 27 Feb 2010 09:12:02 +0000 http://forexmagnates.com/?p=2461#comment-5086 $200 B/month is less than Gain Capital alone in retail fx, if that seems much - then ok, you've got a point there. To me, that's a very small amount which won't allow enough liquidity therefore resulting in poor execution and wide spreads. $200 B/month is less than Gain Capital alone in retail fx, if that seems much – then ok, you’ve got a point there. To me, that’s a very small amount which won’t allow enough liquidity therefore resulting in poor execution and wide spreads.

]]> By: Yehuda Cohn http://forexmagnates.com/fx-bridge-raises-funds-competition-in-fx-software-market/#comment-5085 Yehuda Cohn Fri, 26 Feb 2010 22:46:17 +0000 http://forexmagnates.com/?p=2461#comment-5085 Just did a quick calculation. If retail Forex does $2 trillion in notional spot volume/mo. and options volume were 5% of spot, then that’s $200 billion/mo. Sounds like a fair amount of options, doesn’t it? Just did a quick calculation.

If retail Forex does $2 trillion in notional spot volume/mo. and options volume were 5% of spot, then that’s $200 billion/mo.

Sounds like a fair amount of options, doesn’t it?

]]> By: Yehuda Cohn http://forexmagnates.com/fx-bridge-raises-funds-competition-in-fx-software-market/#comment-5084 Yehuda Cohn Fri, 26 Feb 2010 22:34:57 +0000 http://forexmagnates.com/?p=2461#comment-5084 Okay, thanks. Some comments & questions: In re 1. My guess is there are at least several million retail Forex traders worldwide -- enough to do about $2 trillion notional spot volume/mo. (and create some very profitable companies like FXCM, Gain Capital, FX Solutions, etc.) I'm not sure how that compares; but it seems significant, relative even to stocks, even more so to futures -- in the retail context, that is. Got any numbers? (I don't.) In re 2. Would you agree that a majority of retail Forex traders trade stocks too, and of those a majority probably trade stock options as well? If so, would it not seem like an easy transition from trading stock options to trading Forex options? Okay, thanks. Some comments & questions:

In re 1. My guess is there are at least several million retail Forex traders worldwide — enough to do about $2 trillion notional spot volume/mo. (and create some very profitable companies like FXCM, Gain Capital, FX Solutions, etc.) I’m not sure how that compares; but it seems significant, relative even to stocks, even more so to futures — in the retail context, that is. Got any numbers? (I don’t.)

In re 2. Would you agree that a majority of retail Forex traders trade stocks too, and of those a majority probably trade stock options as well? If so, would it not seem like an easy transition from trading stock options to trading Forex options?

]]> By: Michael Greenberg http://forexmagnates.com/fx-bridge-raises-funds-competition-in-fx-software-market/#comment-5083 Michael Greenberg Thu, 25 Feb 2010 20:50:32 +0000 http://forexmagnates.com/?p=2461#comment-5083 two reasons: 1. retail forex is a fraction of the futures or stocks markets and forex options is a fraction of that fraction. 2. forex options is a much more sophisticated product than spot fx, ergo less people will trade it. 3. forex options is a very nascent market, there's little know-how, education or even liquidity. two reasons: 1. retail forex is a fraction of the futures or stocks markets and forex options is a fraction of that fraction.
2. forex options is a much more sophisticated product than spot fx, ergo less people will trade it.
3. forex options is a very nascent market, there’s little know-how, education or even liquidity.

]]> By: Yehuda Cohn http://forexmagnates.com/fx-bridge-raises-funds-competition-in-fx-software-market/#comment-5082 Yehuda Cohn Thu, 25 Feb 2010 19:57:55 +0000 http://forexmagnates.com/?p=2461#comment-5082 I would guess that a majority of retail Forex traders trade stocks too, and of those that do a majority again probably trade stock options. (Forex traders seem to fit the risk profile.) Options are popular among retail stock traders, what make you think options won’t be popular with much the same type of traders in a different market? I would guess that a majority of retail Forex traders trade stocks too, and of those that do a majority again probably trade stock options. (Forex traders seem to fit the risk profile.)

Options are popular among retail stock traders, what make you think options won’t be popular with much the same type of traders in a different market?

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