by Oz Golan, Tradency.
One month after applying the new 1:50 leverage rule, Japanese FX Brokers are beginning to take action in order to maintain their current trading volumes.
“TOKYO (Nikkei)– Brokerages that handle foreign exchange margin trades are lowering commissions in order to attract customers as stricter leverage restrictions fuel concerns about a shrinking market. Online brokerage kabu.com Securities Co. will launch a Forex margin trading service via the OSE starting Sept. 17. It will charge 105 yen per 10,000-currency-unit contract instead of the 150-200 yen charged by its peers. Okasan Online Securities Co. will waive fees for trades on the TFX’s Click 365 market all September. Since June, the brokerage has cut its commission to an industry-low 52-73 yen.”
This indicates a growing pressure on Japanese Brokers to try and keep Forex trading an attractive investment by lowering the client costs for trading. It is only one move among many that the Japanese Brokers are going to take in order to find ways to maintain their current revenues. I assume we are going to see more diversification of products both within and outside the FX market.
When 1:25 leverage is on the horizon and high leverage is no longer the main incentive for trading Forex, stock trading is a suitable alternative for the retail traders. Japanese Brokers are starting therefore to offer a one-stop-shop for the trader by also offering Stock trading. ” TOKYO (Nikkei) – brokerages specializing in OTC trades have begun offering bourse-based trades as well, intensifying the competition.”
Following the new CFTC 1:50 leverage rule, it’s possible that US Brokers will also consider offering more FX products and other alternative products in the markets , in order to act as a one-stop-shop like MB Trading does already by providing Traders with multiple types of trading options. Since CFDs is illegal in the USA, stock and futures trading is becoming more and more attractive as an offer to traders.
i think its fair to say Fx as an asset class is maturing up!
like any other investment product when markets are clogged up with investors and traders who are simmply clueless then regualtors have to make an impact.
if you look at sharedealing in the UK for medium to long term investors you can pay as little as £5 without any order size limit.
fx is going in this direction and i think we shuold be looking out for the enxt boom. watch out retail bonds, london stock exchange has already started issuing them, with investment size of £10,000-