ValueWalk’s Q&A session with AxiTrader, discussing what the company does, regulations for brokers, if they serve retail or institutional clients, their views on binary options and CFD trading, how they differ from other BDs, the products they offer, and the popular assets these days.
Get extra value with AxiTrader.
Get The Full Series in PDF
Get the entire 10-part series on Charlie Munger in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.
Q2 hedge fund letters, conference, scoops etc
Can you tell us about your background?
AxiTrader goes back to 2007 when it launched in Sydney as a two person startup. That made Australia our natural home market but, right from the beginning, the aim was always to take the company global. We opened a subsidiary in the UK pretty early on but the initial years were probably characterised by gentle but steady growth – just finding our place in the market. Things have changed a lot though, especially in the last couple of years where we’ve really been rocketing forward and expanding across the world. It might be something to do with getting through those first 10 years – which is a milestone in itself – but whether you look at it in terms of geographic spread, technical capability, trading volume or number of clients, AxiTrader is far bigger and better than it’s ever been before.
Can you briefly describe AxiTrader?
In a nutshell, AxiTrader is an online broker. When someone wants to trade a product electronically – for example currencies, CFDs, metals, commodities, cryptocurrencies or indices – we’re the conduit between them and the open market. Basically, a client opens a trading account and we give them access to the software they’ll need to trade, educational resources to help them get going, customer support and technical expertise. Once people are with us we also offer a lot of extra things like advanced trading and management tools.
What people might not be so aware of is that AxiTrader is the largest cog in the far more multifaceted financial services business of AxiCorp. Alongside AxiTrader we also have AxiPrime which is a specialist broker for institutional grade clients, AxiSelect which is a funding and development pathway for talented traders, AxiForex as a specialist payment provider – amongst others. We also have deep partnerships with associated trading-focused businesses like PsyQuation. Essentially that makes us a one stop shop for anything related to trading!
Every country has different regulations regarding brokers – what countries do you deal with? Is it open to US investors?
We service clients pretty much everywhere, although there are a handful of exceptions for some high risk regions, and for countries – like USA and Japan – which don’t allow for residents to deal with overseas based brokers. As a licensed and regulated broker we place a huge amount of importance on ensuring we operate within regulatory boundaries.
How do you protect investor assets? Are you regulated by the SEC, FINRA, CFTC or related US regulators?
Because we don’t deal with US-based clients we aren’t bound by those particular regulators. However, we are regulated by governing authorities in a number of other jurisdictions around the world – ASIC in Australia, FCA in the UK, FMA in New Zealand and DFSA in the Middle East. In terms of protection at a client level, we bank client funds in segregated accounts with top tier banks, plus we’ve taken out seperate insurance to help cover our clients in certain situations in the event of an undue loss.
Do you offer anything else like RIA or Wealth management services?
Yes, we have AxiWealth which was created as a standalone wealth management service. It’s more of a bespoke service based on the needs of the client and a whole lot of other factors, but suffice to say it incorporates the best of both our retail and institutional capabilities.
What type of clients do you have – retail or institutional?
We serve both. AxiTrader as a business is focused on retail and professional clients while we have a seperate service, AxiPrime, that serves the very different requirements of institutional level traders.
Are your clients traders or investors?
Again, we cater for everyone. Day to day business at AxiTrader is focused more towards what you might call “regular” trading, but of course we have plenty of avenues for investors, from more classic streams through to innovative channels like AxiSelect where investors can back talented traders that we’ve identified through our funding and development pathway.
How do you differ from other BDs? What sets you apart?
What we strive to do is put together an exceptional package. Being a broker in the modern world is an extremely complex business, but we take pride in ensuring that we offer a really complete experience, from the sharpest pricing to the most useful technology, award-winning customer service and a really comprehensive set of educational resources. Basically if you come to us as a new client, we’ll ensure you’re set up with everything you need to trade successfully and profitably.
Some experts say binary options and CFD trading is dangerous and some call it an outright scam. What is your view of these products?
Binary Options is not a product we offer so it’s difficult to comment with true authority, but from a broad industry perspective one of the inherent issues is risk. All trading carries some degree of risk but brokers these days are legally obliged to make this absolutely clear to clients. Indeed, with the number of mandatory risk warnings it would be almost impossible for a trader not to be aware of potential negative outcomes, which of course is the point of the exercise. The nature of Binary Options trading perhaps lends itself to being riskier – or at least perceived as riskier – but, provided the operator is putting those warning messages out there loud and clear, ultimately it’s the user that has the final decision as to whether they want to trade or not. If there’s a middle ground to be had, it’s perhaps a case of encouraging people to make use of a trial or Demo account to see if its the right product for them.
Are there any products you refuse to offer due to ethical or legal concerns?
Not based solely on that criteria but, to add context to that, we’re very picky about the products we offer. There are definitely other brokers out there who offer a wider range of trading products, but we like to think we’ve got a list that’s been carefully curated – a kind of quality over quantity approach. When we do add or remove a product, there’s good reason for it. Ethical considerations would have to be dealt with on a product by product basis, but legal concerns are a lot clearer: we operate under a financial license and there’s no way we’re putting either that or our clients’ trust in us at risk for the sake of adding an extra trading product.
What trends are you seeing with your clients? What assets are popular these days and how has that changed from the beginning of 2019?
That’s always an interesting question. Traders can be creatures of habit – as soon as some major event happens in the market they tend to go flooding back to the reliable and familiar instruments like gold or US dollar pairings. Then again, traders also like a bit of risk and are always looking out for strong opportunities. For example, two of the top performing currencies so far this year have been the Russian Ruble and the Mexican Peso. Cryptocurrencies are also a growth area, with Litecoin actually faring better than the more well-known Bitcoin. No one ever knows what’s going to be sitting at the top of the trend charts by the end of the trading year, but we always have a lot of fun finding out!
Check out more about AxiTrader right here