Interview with Conor Foley, CEO at WorldSpreads E-mail us for questions or to suggest an interview at traderATfinancial-spread-betting.com
FSB: Tell us a little about WorldSpreads. Who owns WorldSpreads and how long have you been in business?
Conor, WorldSpreads: WorldSpreads is a specialist financial spread betting company, based in the City of London. The company is publicly quoted on the London Stock Exchange and has a wide database of shareholders comprised of City institutions, overseas asset management companies and private individuals. The company was founded in 2000 and floated on the LSE in 2007.
FSB: How big is WorldSpreads? How many people do you employ?
Conor: WorldSpreads has a total of 74 staff, 42 of whom are based in London, 6 in Dublin, 12 staff throughout Europe (Germany, Spain, France, Portugal, Greece, Denmark and Sweden) and 16 in Kuala Lumpur, Malaysia. The 'size' or market capitalization of WorldSpreads changes on a day to day basis but is currently about GBP31 million.
FSB: Earlier in 2009, you have divested of your sports spread betting and Irish financial spread betting operations to concentrate on financial spread betting in the UK mainland and Europe. What prompted the change in strategy? Why sell part of the business to your own Irish based management team?
Conor: We divested of our sports spread betting division in early 2009 in order to focus exclusively on financial market trading. We divested of our Irish financial spread betting division in 2009 because we believe the growth opportunities for us are superior in the UK and carefully selected European countries over the next few years. The Irish economy is going through a difficult phase at the moment and we believe the opportunities may be better elsewhere.
FSB: WorldSpreads is in the route to world domination with expansion already in over 10 countries. How true is this statement? Is your strategy of opening regional offices in different countries bearing fruit?
Conor: 'World domination' is a little bit wide of the mark! If we achieve higher penetration rates in the UK and establish foot-prints in a number of key European territories over the next 2 years, we will consider it a success. To date, our 'regional office' strategy has been very successful, especially in Spain, France, Greece and Hungary, where we have now have a healthy and diversified database of clients.
FSB: WorldSpreads can be summed up as the home of the one point spread; the spread betting company which offers 1 point spreads on all major index rolling futures and forex contracts during market hours. But are your spreads always fixed at 1pt even in periods of very high volatility? How are you able to offer spreads so tight when most other providers have shunned from matching your spreads? And how do you cope during news releases when traditional forex brokers commonly widen the spreads to 10 pips or more?
Conor: The difference between WorldSpreads and some other spread betting companies is when we say we offer 'one point spreads' we definitively offer one point spreads, as opposed to widening the spreads when the wind blows. Even in periods of high volatility or during news releases we do not widen the spreads because we believe clients need to know with certainty the spreads on which they can trade. We are happy to offer these prices on which we could only be expected to 'break-even' because clients who trade on these markets also trade markets on which we can reasonably expect to generate normal profits.
FSB: You are unique in the sense that you offer both CFDs and spread betting and target international clients in that specific country's local language. Are international clients able to choose between whether to open a CFD trading account or spread betting? Tell us more about your business strategy.
Conor: Yes, international clients are able to choose between CFDs or spread betting. However, the fastest growth is in online spread betting overseas and we expect to see that trend continuing. One of the reasons for this is because overseas clients can trade markets like the FTSE or GBP/USD in their own currency. A Dane, particularly a great one, can 100 Danish Krone per point of the FTSE and his profit or loss will be denominated in Krone, as opposed to generating a profit or loss in Sterling and having to convert it back to his base currency of Krone.
FSB: There has been something of an explosion in the popularity of spread betting in the United Kingdom over the last few years. What has been the impetus for the spread betting industry growth? Has the UK retail investors' speculative market reached saturation point?
Conor: Explosive growth rates of this nature can only materialize if the product being offered is truly exceptional. For retail investors, it is not possible to improve on a product that offers minuscule spreads, no commission, no Capital Gains Tax, leverage and the ability to go short as well as long. Financial spread betting is an unbeatable way to trade the financial markets. I don't believe the market has even come close to saturation point in the UK when one looks at the huge number of retail investors who have yet to convert to financial spread betting as their preferred way to trade the markets. Growth rates are even higher again outside the UK, notably in Europe, where the product is very well received. We expect to see growth rates continue to increase.
>> Page 2 - WorldSpreads Interview Continued: Platform, Margins and Execution
>> Page 3 - WorldSpreads Interview Continued: Industry and Client Traits
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