Based in Canary Wharf development of London, GFT Global Markets UK Ltd. is a sister company to the online forex dealing firm Global Forex Trading, Division of Global Futures & Forex, Ltd. The London-based division of the leading U.S. firm, Global Futures & Forex, Ltd., has been established to offer spread betting, contracts for differences and spot forex trading services to active traders, hedge funds and institutions in Europe, Australia, Asia and the Middle East. In this interview we speak to Martin Slaney, Head of Spread Betting of GFT Global Markets UK Ltd.
Interview with Martin Slaney, Head of Spread Betting of GFT Global Markets UK Ltd. - Division of Global Futures & Forex, Ltd., conducted by Guido, co-editor - Financial-Spread-Betting.com. E-mail Guido for questions or to suggest an interview at traderATfinancial-spread-betting.com
Financial-Spread-Betting: First and foremost I want to thank you for being patient with me and taking the time to do this interview for our Financial-Spread-Betting.com readers. How's everything on your end?
Martin: Very well thanks, if rather hectic! It's a pleasure to be with you on Financial-Spread-Betting.com, and hopefully your readers will benefit from our insights.
Financial-Spread-Betting: How big is GFT Global Markets? When did you launch? What is your company's main activity? Please introduce yourself and your company to our readers and tell us a little about the founders' background.
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Martin: GFT Global Markets was launched in 2006 as a provider of spread betting, CFDs and spot forex dealing services. We provide UK and international customers with highly dedicated financial spread betting services for the global financial markets. We are related to the US-based world-leading currency dealer, Global Forex Trading, which serves a global customer base in more than 120 countries from its headquarters in Michigan, and additional offices in New York, Chicago, Tokyo and Sydney. This advantage allows GFT Global Markets to leverage the same pioneering trading technology and dealing practices that GFT has employed since 1997?
The founder and chairman of GFT Global Markets is Gary Tilkin. As a veteran of the financial futures and commodities markets and a professionally licensed trader, Mr. Tilkin envisioned a better solution for his clients who were trading exchange-traded currencies. At the time, the alternatives available lacked in market accessibility and customer service, so in 1997, Mr. Tilkin set out to create a solution at his own risk. The result was the creation of Global Forex Trading, Division of Global Futures & Forex, Ltd., one of the first firms in the United States to offer online forex trading.
Personally, I have worked in the financial betting industry for nearly 12 years. In 1995, I helped establish the Australian office of a leading UK spread betting company. I then went on to co-found another spread betting company, serving as the head of internet trading and playing a leading role in the industry's first interactive online trading platform. In 2003, I was appointed MD of the first-ever betting exchange for financial markets.
Financial-Spread-Betting: It is my understanding that GFT was previously operating in the UK but ceased trading with UK customers in the second quarter of 2005. Please expand.
Martin: GFT had a few UK customers before it decided to move into the UK with GFT Global Markets. In the licensing process of GFT Global Markets, the parent company GFT learned that it was permissible according to the FSA for it to maintain business relationships with UK citizens without FSA licensing. At that time, GFT decided to withdraw from doing business with UK citizens until it was properly registered according to the FSA.
Financial-Spread-Betting: Tell us why you decided to plunge into the spread betting and cfd business.
Martin: In its quest for expanding the company's global reach, GFT was always keen to establish a London presence for its FX trading operations. Because of the popularity of spot forex, CFDs and spread betting in the U.K., it made sense that we would open an office to better serve a growing customer base. Having also identified a need in the market for a highly advanced yet easy to use platform in the rapidly expanding spread betting and CFD industries, GFT felt the market was ideally suited for a trading system based on our award-winning trading software.
Financial-Spread-Betting: What dealing platform do you use? Is it proprietary? What would you say really stands out about it? Does the GFT Global Markets spread betting platform work in the same way as the CFD platform?
Martin: We believe our trading platform is the most advanced, reliable and trader-friendly system there is for spread betting, CFDs and spot forex. The same system is used to offer access to all three products, and it is indeed proprietary and unique. Known as DealBook® 360, the platform offers unrivalled flexibility in terms of order management, customisable charting and overall depth of features. For example, it is possible to place trailing stops on all markets, manage all your orders via the charts, and even trade directly from the charts. You also have access to real-time world and financial news from Dow Jones Newswires and third-party analytical services. Anyone can open a demo account to view the platform for themselves - the demo version is identical to the full-account platform and is a very good way of exploring all the system's benefits before opening an account.
Financial-Spread-Betting: Spread betting has always been marketed as being tax-free. But how big a deal is the tax-free status, given that rival trading products let you offset losses against gains?
Martin: Many customers find the 'what you see is what you get' way of trading - that is, what you get from spread betting - highly advantageous in tracking their trading P&L. To know that you can trade on the price moves of thousands of financial markets, going long or short, without the administrative hassle of keeping all your trading records for your tax return, is a very compelling proposition. And the tax-free status can really add up for traders. For example, if you were to trade a position size each day of £25,000 through a traditional stock broker, the current yearly stamp duty you'd have to pay would be £27,500.
Financial-Spread-Betting: Could you walk us through GFT Global Markets' products? In particular, what types of underlying investments, markets and events can I trade on? Do you offer trading on UK sectors (food & drug, construction, etc)? Also do you offer trading on FTSE 350 stocks and small caps?
Martin: We offer prices on literally thousands of financial markets. Given GFT's legacy in technology and pricing, we naturally pride ourselves on the range of currency markets available, more than 100 in fact, which is more than many dedicated forex providers, never mind spread bettors! In addition, you have access to a vast range of equities, including the FTSE 350, France's SBF 250, the Australian ASX 100, hundreds of US stocks and many more. We also offer access to commodities, indices, interest rates and government bonds. A full list of the markets we offer is available at www.gftuk.com
Financial-Spread-Betting: Do the spread bets offered by GFT Global Markets have a definite expiry date or can they be rolled over? If bets are allowed to be carried over will I still have to settle the amount lost from the previous trading session?
Martin: Bets on futures markets all have a definite expiry date, which is indicated on your deal ticket. Bets on FX and cash indices are all on a 'rolling' basis which, if left open, will be automatically closed and re-opened every day, realizing any resultant P&L in the process.
Financial-Spread-Betting: What is the procedure for opening an account? Do you accept international clients? How much do I need? Is there a minimum/maximum deposit? What are the minimum/maximum trade sizes? Do you really allow bet sizes to go all the way to £1000/pt on certain markets?
Martin: Opening an account is usually fast and straight-forward. We accept international customers, where permitted by law. The account opening process can all be done online and should take just a few minutes. We endeavour to open accounts within 24 hours. Account minimums for spot forex mini trading accounts start at just £250 and £1,500 for standard trading accounts. Standard minimum lot sizes are 100,000 for standard accounts, and 10,000 for spot forex minis. GFT is confident in its liquidity so we do not currently have an issue with bet sizes of 1000/pt.
Financial-Spread-Betting: I've opened a demo account and so far the execution of trades has been faultless. I've also noted that you offer some great charting software. Tell us about your Chart Studio®.
Martin: GFT Global Markets offers one of the most comprehensive charting packages available across all our markets, for free. Chart Studio® enables you to build your own trading system (using a common technical analysis language) and export it directly into the GFT UK trading platform. Customers who favour charting analysis find this aspect especially beneficial.
Chart Studio® is a free software program that is included for no cost with DealBook® 360. It provides trading system developers with the ability to design, build and historically back-test their own unique technical studies and trading strategies as well as automate their trading systems. It is designed so that all custom tools, such as custom indicators, studies and forex strategies can be directly imported into DealBook® 360. In 2008, we expect the powerful automatic trading systems component to be a popular feature among our traders.
Financial-Spread-Betting: What level of leverage do you offer as standard? Do you offer credit facilities? Can accounts be overdrawn?
Martin: Initial margins for standard accounts start at 1%, or up to 100:1 leverage. On the spot FX side, we also offer a Mini Account with leverage as high as 400:1. This is particularly useful to those who have traded with the demo account but want more experience trading smaller amounts before proceeding to the larger spot forex account. In some account situations, we will offer credit facilities. These are approached on a case by case basis for generally high net worth individuals of outstanding financial standing.
GFT Global Markets has an automatic risk-management system that notifies you before your gets too far off track. P&L are calculated automatically in real-time, and you receive instant notifications if your losses reach a specific level.
Financial-Spread-Betting: Please explain how you handle re-quotes and order confirmation times. If I place an order, will the price be re-quoted? And fast markets?
Martin: The majority of fills are processed promptly, automatically and at the price requested. Occasionally, the nature of fast markets will mean an order could be rejected or re-quoted, but we endeavour to keep this to a minimum and above all fair.
Financial-Spread-Betting: In reading some of the discussions on the internet, it appears some traders have expressed concern over the dealer trading against them. In other words if you buy something, the dealers' computer will be programmed to make you buy, on average, for prices excessively higher than you should reasonably pay. If you sell something, the dealers' computer will be programmed to make you sell, on average, for prices excessively lower than you should reasonably pay. Please comment.
Martin: I haven't come across this practice in any of the spread betting or CFD companies where I've worked. In my current position with GFT, we accept more than 99 percent of our orders automatically based upon the available pricing to our customers.
Financial-Spread-Betting: Do you hedge clients' positions (or 'net positions')? Or do you simply take a view of the market each day and adjust your quotes accordingly to balance your spread? If so, wouldn't moving the spread create potential arbitrage opportunities at the other spread betting companies?
Martin: Whilst we maintain a risk adverse policy, there are inevitably instances where we do accumulate un-hedged positions, for example when the size of the trade is deemed too small to offset commercially with one of our liquidity providers. For this reason, there may be occasions when a customer loss results in a profit or when a customer profit results in a loss for us. It's never that simple, since many customers have more than one view of the markets they are trading. Our related company, Strategic Trading Institute, offers trading education programmes that are designed to help improve your profits.
Financial-Spread-Betting: What types of client do you aim to attract? What type of client and what type of uses are your particular products most suitable for? How do you classify clients - intermediate or private customers and why?
Martin: Trading with GFT Global Markets is appealing to all people with an interest in the financial markets. Our platform makes it possible for individual speculators to trade the same rates and price movements that were once only available to the larger players and funds. This is a compelling proposition whatever your trading background! We do find that our customers have fairly short-term, higher frequency trading patterns, and believe this is possible, thanks to the constantly competitive spreads combined with a highly user-friendly platform. Spread betting and mini spot FX customers are classified as private accounts; CFD and standard spot FX accounts are classified as intermediates. We also offer an institutional client program which is an easy way for institutions to offer our products to their customer base whilst receiving significant referral payouts. These firms can white label our trading software and offer the very finest in order execution to their customers as well.
Financial-Spread-Betting: From time to time I get the occasional e-mail from readers who are afraid that their spread betting company (not GFT Global Markets) would cancel their accounts if they made constant profits. We have also heard of clients complaining that their orders were taking almost a minute to get processed and orders were being refused based on price movements within that time (again not specifically referring to GFT Global Markets')? Please clarify your company's position on such matters.
Martin: Whilst I am naturally not in a position to comment on what goes on at other firms, at GFT Global Markets, it would be extremely rare for a winning account to be closed on that basis alone. As a general rule, if the customer wins, we win - that's what the spread is for.
Financial-Spread-Betting: Do your products involve telephone or online trading, or both? Is there a cost difference if both are offered?
Martin: The benefits of trading with GFT Global Markets are derived from our online platform, hence the vast majority of our customers choose to trade in this way. Nevertheless, we do have a dealing desk that is manned 24 hours a day from 10pm on Sunday until 10pm on Friday (London time) and this is available for telephone trading as well. Our dealing desk is modeled after many of the world's largest banks and trading operations, so customers are serviced to the highest level, around the clock.
Financial-Spread-Betting: Do you offer stop entry and stop loss orders? What are the charges (if any) associated? Is a guaranteed stop loss (GSLO) offered, and if so at what level. Are GSLO offered on all stocks? Can guaranteed stops be attached to both market and limit orders? (or just market?).
Martin: In order to assist customers in limiting exposure to loss, GFT Global Markets offers a comprehensive and flexible range of market orders that can be used to either limit your losses or realize profits at specified levels. Market orders, limit orders, stop orders, trailing stop orders, one cancels other (OCO) orders, parent and contingent (If done) orders and guaranteed stops are all available. We believe this to be the most comprehensive order system available in the spread betting and CFD industries. The range of markets coverable by guaranteed stops does not currently extend to individual equities, but we are looking to expand the range in the near future. Charges are only applied to guaranteed stops and are competitive. For full details, you can view the Market Information Sheets on our website, www.gftuk.com
Financial-Spread-Betting: Please explain your parent and contingent orders to our readers.
Martin: These are two separate orders that are linked by an if/then condition. The contingent order will not be subject to a fill until the parent is filled. This allows traders to set up the entire trade while they are away from their trading desk, including entry, exit and risk management, based on specific market prices.
Financial-Spread-Betting: Is interest paid on the balance of the accounts? If yes, what are the rates? How are dividends accounted for?
Martin: On rolling spread bets, and CFD currency and equity trades, financing adjustments may apply. If you hold a long position (buy) you pay financing charges (e.g. LIBOR + 3 percent), and if you hold a short position (sell) you receive the financing payments (LIBOR - 3 percent). Our rates are based on the relevant overnight LIBOR (London Interbank Offer Rate), which is published on the British Bankers' Association website (www.bba.org.uk). Long positions on share or index markets receive a percentage of dividends; short positions pay a percentage of the dividend amount.
Financial-Spread-Betting: Are there any other fees which our readers need to be aware of besides the spread? Do you charge a quarterly trading account fee or an account inactivity fee or a fee for spread bets made over the phone...etc?
Martin: There are no charges for trades made by telephone. Equity CFDs incur a 15 basis point charge on top of the cash market rate across all equities - this is highly competitive but there is also currently an introductory discount of 33% on this rate for the first 60 days. There are no commissions or additional brokerage fees charged on non-equity CFDs, spread bets or spot forex.
Financial-Spread-Betting: Contracts for difference are sometimes criticized because one can end up paying interest not only on the margin and the 'borrowed' amount, but also on the profits. Please comment.
Martin: Well you are indeed charged for long positions but of course you are, conversely, credited for short positions, as we explain in the previous answer. I'm not sure how you would end up paying interest on the profits.
Financial-Spread-Betting: I appreciate this question will vary according to market conditions and individual stocks, but in general I wondered if you could tell me what you consider a sensible value to invest in a CFD. I spoke to one CFD adviser who suggested that in order to achieve a good return the total contract value should be in the order of £10,000, i.e. investing around £900 but buying shares to the value of £10,000.
Martin: I think it all depends on a variety of factors, such as one's individual financial circumstances and trading goals. The beauty of spread betting or CFDs is that you are not subject to the same size restrictions that may be imposed on a futures or stock trading account.
Financial-Spread-Betting: Can one participate in the auctions at the scheduled open and close of the market? Please also clarify your policy regarding using stops in the pre-open phase of market? For instance, if I had a stop loss for a stock and the estimated opening price was below the stop loss level, would you stop me out of the trade due to potential margin breach before the market opened?
Martin: For the majority of our markets, you trade the CFD or spread bet when the regular trading phase of the underlying market is open, so auctions do not count. All orders are left basis 'Our Quote'.
Financial-Spread-Betting: Because of financing charges, does this mean that CFDs are not good for holding over long periods? And how would you define a 'long period'? Any other perks or account benefits which our readers should be aware of?
Martin: CFDs, and our 'rolling' spread bets, are ideally suited to short-term trading of less than 4 weeks, rather than longer-term investment. Our market specialists can personally assist you as you learn to navigate the market and features of our software. We offer free one-to-one training for GFT Global Markets customers, so you receive the proper education required to trade the markets. We are very focused on customer service, and provide our customers with personalised support. Many of our benefits discussed earlier, including our automated risk-management notifications, variety of order types, and range of markets, are major advantages for our customers.
Financial-Spread-Betting: What services are you offering that others aren't? How do you compare your spreads to the competition? Why should customers choose GFT Global Markets as their spread betting firm of choice?
Martin: Many of the features on our trading platform, such as trailing stops, alerts and the ability to place trades and orders via our charts are unique features. Our range of FX markets is also worth pointing out. There are over 100 currency pairs available as spread bets and CFDs - more than our competitors, I believe. Our spreads and initial margins are highly competitive, e.g. we offer a 3 pip spread on sterling/dollar and 2 pips on euro/dollar. Overall, we believe our trading platform is revolutionising the industry and is quickly becoming the best-in-breed.
Financial-Spread-Betting: What are your current plans of expansion? Is there anything new going on with these days? Any hint to what is going to be the next top product you'll be launching?
Martin: One of the products we are most excited about just recently became available. It is new market prediction service called Foresight-A.I., which is a product of our related company, Strategic Trading Institute, and is offered exclusively in DealBook® 360. It is an artificial intelligence program that helps traders to see market highs, lows and overall trends a night in advance.
The fully automated trading feature of DealBook® 360 will soon be available as part of our Chart Studio® feature. We are also developing other web-based applications that will enhance the trading of our customers.
Financial-Spread-Betting: As of now, what trends do you see in the markets people choose to trade? Are there any sectors, contracts, currencies, indices or particular markets where your clients are clearly more or less successful? Do you think this will change over time?
Martin: Over the last year currencies have become hugely popular, thanks to a combination of volatility and low spreads. Over the last few months, the rising levels of merger and acquisition activity has led to a resurgence in interest in equities across the board, and at GFT Global Markets we pride ourselves on the wide range of equities available to trade. Gold and oil have also been heavily traded - again, volatility breeds volume here, and I foresee our client base developing a growing taste for other commodities such as coffee and cocoa, which can provide dramatic and sudden moves.
Financial-Spread-Betting: Where do you see traders placing their money in 2008? What are your recommendations?
Martin: I think continued M&A activity will continue to attract interest for equities as customers attempt to predict likely takeover targets. The utility sector is very active and is ripe for further consolidation.
Financial-Spread-Betting: What do you think are the most important characteristics of the professional spread better?
Martin: Discipline, discipline, discipline. Develop a set of trading rules and stick to them. It sounds easy, but few traders actually follow such a plan. Mind games often take over and profits get taken too quickly and losses run for too long. Education is another component to trading that cannot be overlooked.
Financial-Spread-Betting: We've seen more companies move into this market and the structure of bets change. What changes do you think there are going to be over the next few years? What challenges do you see ahead? Tell us a little about your future plans.
Martin: I think the spread betting and CFD industry is due for further consolidation - we've already seen two of the players merge this year and it wouldn't surprise me if some of the smaller independents were snapped up. That said, I still believe the international (non-US of course!) demand for CFDs and spread betting type derivatives is massive, and I expect significant growth for GFT in Europe, Australia and the Far East.
Financial-Spread-Betting: Do you provide any training for new clients? Do you have any special sign-up trade offers for our readers who decide to go ahead and open an account at GFT Global Markets?
Martin: Yes and yes. We provide one-on-one training with a market specialist should it be required. Our affiliated company, Strategic Trading Institute, offers training via on-demand webinars, DVDs, online training courses and personal workshops worldwide.
We currently offer a discount of 33% on CFD commissions (equity trades) for the first 60 days of trading. This means customers are able to trade our entire range of equity CFDs for just 10 basis points, which is an incredibly competitive rate.
Financial-Spread-Betting: Do you operate any other sites besides www.gftuk.com?
Martin: GFT Global Markets UK is related to the leading company GFT (www.gftforex.com), which is also owned by our parent company, Global Futures and Forex Ltd. Another division of GFF is Strategic Training Institute (www.stitrader.com), which offers market training and education.
Financial-Spread-Betting: What should our readers do if they're interested in your spread betting and CFD trading services?
Martin: Either go to www.gftuk.com, where you can find more details regarding all of our products and services, or by all means call us on +44 20 7170 0770 and one of our specialists will be happy to help with any questions you may have. Thanks for reading and I hope this has whetted your appetite for trading with GFT Global Markets!
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