Intertrader Completes Transition
Most wouldn’t have noticed, but there have been some significant shifts occurring at Intertrader during the last year. The London-maintained firm has been making substantial changes to its operations to increase revenues. Recently, the company has acquired two financial trading businesses that will help to provide an upgrade to the financial products offered by Intertrader. This information comes from GVC Holdings, the parent-company of Intertrader.
The first company acquired is Sigma Trading, a former subsidiary of Sigma Broking. The team behind this development firm will now work towards creating derivatives for experiences traders using the Intertrader platform. The second company acquired is Argon Financial, which will crease multiple brokerage solutions for professional and institutional clients with Intertrader.
Intertrader Speaks Publically
It appears that the endgame for Intertrader is for a large-scale rebranding. The companies CEO, Shai Heffetz, spoke openly about the future of her company by saying, “We’ve been preparing to make changes since mid-2015. I could see then where the wind was blowing and started to put the wheels in motion. Then when the Financial Conduct Authority proposed changes in late 2016, we realised we probably had less time than we thought we had and redoubled our efforts.”
She continues her statement with, “The majority of our revenue is now split fairly evenly between three business divisions. That includes prime brokerage activities, our dealings with corporate, professional clients and institutions. Real retail clients now only account for about 10% of our revenue.”
In today’s current market, this is something that all other brokerages secretly envy. Intertrader, by changing up the game early on in 2015, was able to avoid a significant degree of the backlash that resulted from the new product intervention measures implemented by the European Securities and Markets Authority. However, by changing the business structure to focus primarily on professional clients, they’ve been able to avoid product intervention measures, which apply to public brokerages only.
Plus500 is one of the brokerages that have had difficulties regaining clients to their platform and envies the changes made by Intertrader. Retail investors contributed to 75% of their revenues. As a result, by the end of 2018, the company has lost 44% of its revenue.
Intertrader moved away from the retail market six years ago. Since then, they’ve not traded against their clients, which have allowed the firm to transition to new forms of business quickly. The firm wants to turn into a prime brokerage, which would enable them to become a leader in the European market.
MrHeffetz stated, “I decided back in 2013 that we would stop trading against our clients. That was for ethical reasons, but it also made – in the long run – business sense. Comparatively, we haven’t been able to make the money that our competitors have over the past couple of years. But now they are stuck with a b-book model and can’t get out of it. We aren’t. And that means that, on top of a professional client base that respects us, we can more easily expand into offering new sets of products and services.”
The Prime Services
The expansion has been successful for Intertrader, as the company now makes a third of its profits through activities relating to prime broking. There aren’t any plans to stop slowing down anytime soon either, with growth now being the main goal for Heffetz. He stated, “I want to dominate the prime of prime space. We now have a full set of clearing and execution services. So you can trade via direct market access with us, on the platform of your choosing, and then we also provide you with those clearing and execution services. We are already offering to trade in cash equities, but it’s an area we plan on growing in. We have a set of B2B and B2C strategies in place to make that happen.”
Intertrader isn’t exclusively expanding their products and services into the prime brokerage space though. The firm also has plans to focus in on contracts for difference, foreign exchange and spread betting within the United Kingdom. Today, clients can use futures and structured products through Intertrader. There are also cash equities to trade with, and Heffetz has come out publically, stating that it will be commission based trading.
The Next Big Thing
Intertrader has completed their transition into prime broking. Their services are advertised towards professional and institutional clients, allowing for them to avoid a large portion of the regulations that have been plaguing Europe’s Forex and Foreign Exchange markets. This has caused many other brokerages to begin their transitions into prime broking. However, Intertrader has a leg up on them and as such will receive substantially more clients in the coming months.
MrHeffetz ended his public statements by saying, “I see us as being the next IG. I don’t mean in terms of size or business model but terms of revenue. You’re looking sceptical, and that’s okay. It’s not going to happen overnight. It’s going to take hard work and a lot of patience. But look at it from this angle; it took IG fifty years to get to its current position. We’re just beginning.”