Profile: FXCM Inc (FXCM.N)
FXCM Inc. (FXCM), incorporated on August 8, 2010, is an online provider of foreign exchange (FX) trading and related services to approximately 170,930 active retail customers globally. The Company offers its customers access to over-the-counter (OTC) FX markets through its technology platform. It primarily offers customers an agency model to execute their trades. In the agency model, when its customer executes a trade on the price quotation offered by its FX market makers, it acts as a credit intermediary, or riskless principal, simultaneously entering into offsetting trades with both the customer and the FX market maker. It operates its business through two segments: retail trading and institutional trading. Its institutional trading segment, FXCM Pro, offers FX trading services to banks, hedge funds and other institutional customers on an agency model basis. On June 18, 2012, the Company acquired a 50.1% interest in Lucid Markets Trading Limited and Lucid Markets LLP. In September 2013, FXCM Inc acquired a 50.1% controlling interest in Faros Trading LLC (Faros).
In addition, it owns a 50.1% controlling interest in Lucid Markets Trading Limited. As of December 31, 2012, retail trading segment accounted for 85.1% of its total revenues. As of December 31, 2012, institutional trading segment accounted for 14.9% of its total revenues. It offers its trading software in 17 languages, produce FX research and content in 16 languages and provides customer support in 18 languages. It offers three types of accounts, each designed for a particular type of retail FX trader. Basic account is designed for those new to FX trading and it enables traders to open accounts between $50 and $4,999. These accounts offer trading in small increments, providing support and access to DailyFX resources. Premium accounts are available to clients depositing between $5,000 and $24,999. These accounts allow corporate entities accounts, include additional customer support options and allow customization of account type and setup. The Company also offers Active Trader accounts that are designed for experienced, high volume traders and generally require an opening deposit of $25,000 or trading volume of at least $10 million per month. It also offers trading in a growing number of other financial instruments.
Spot FX Pairs
The Company offers spot FX trading in over 58 currency pairs. Of these pairs, the Company’s seven currency pairs represent over 88.7% of all trading volume.
The Company offers its non-United States customers the ability to trade CFDs, which are agreements to exchange the difference in value of a particular asset, such as a stock index or oil or gold contract, between the time at which a contract is opened and the time at which it is closed. Its CFD offerings include contracts for metals, fixed income, energy and stock indices, and during the year ended December 31, 2012, CFD trading constituted approximately 18.8% of total trading volume.
It offers spread betting trading to its United Kingdom customers. During 2012, spread betting constituted approximately 1.5% of total trading volume.
Equities and Equity Options
It offers its customers equity and equity option trading through ODL Group Limited (ODL). ODL offers customers outside of the United States the ability to trade equities and options on the United Kingdom, continental Europe and the United States markets. They are offered using an ODL platform, as well as third party software that connect to third party data providers, clearing firms and other market participants.
The Company offers a number of trading systems, all of which are supported by its technology infrastructure. Its technology tracks the balances, positions, profits and losses and margin levels for all account holders in real time. The back office system’s real time margin-watcher feature automatically closes out open positions if a customer’s account is at risk of going into a negative balance as a result of a trading position losing value and reaching the minimum margin threshold.
Trading Station II (TSII) is a flagship technology platform. TSII is designed to serve the needs of its retail FX customers, but also offers functionalities often used by professional money managers and our institutional customers. TSII is a Windows-based platform with a variety of customization options for users to choose from including a choice of 17 languages. The platform provides an advanced chart offering called Marketscope, which offers a array of customization features, technical analysis indicators, signal and alert functionality, as well as the ability to place trades directly from the chart. Active Trader Platform, also a technology platform, was built and designed for its higher volume customers. The platform is Web-based. Meta Trader 4 (MT4) is a third-party platform built and maintained by MetaQuotes Software Corp, and the Company has licensed the rights to offer it to its customer base. FXCM Pro is its institutional level FX offering that allows banks, hedge funds, professional money managers and other such entities to trade anonymously, similar to an Electronic Communication Network. The Company licenses the technology platform for FXCM Pro from Currenex and Integral. FastMatch is a third party electronic communication network (ECN) for spot foreign exchange trading that offers customers access to pools of diversified liquidity.
The Company’s Trading Station Web is Web-based. The Browser based platform allows customers to access their account from any computer without installing any additional programs. Strategy Trader is a platform that provides an alternative to customers who prefer to automate trading strategies that they have either built themselves or bought from other developers. Mirror Trader Platform, is a third party platform that it licenses, which allows customers to scan and review pre-programmed and pre-filtered trading systems and over 1,000 automated strategies.
Ninja Trader Platform is a trading software provider. Ninja Trader also offers free, daily trading webinars, an interactive product training video library, and an active online forum. Ninja Trader also offers multiple simulation options. The Company also offers mobile platforms for multiple mobile devices, including Blackberry and the iPhone/iTouch.
The Company competes with Gain Capital Holdings Inc., OANDA Corporation, FXDirectDealer, LLC, InterbankFX, LLC, MB Trading, FX Solutions, Saxo Bank, CMC Group, IG Group Holdings plc, City Index Limited, OptionsXpress Holdings, Inc., E*TRADE Financial Corp., TD Ameritrade, TradeStation, Interactive Brokers, Deutsche Bank, Citi, Barclays and Goldman Sachs and GSA Capital Partners LLP.
FL 50, 55 WATER ST.
NEW YORK NY 10041