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FX as an Asset Class: Boost your Performance in Forex Trading
Peg Reed, Interbank FX
Risk Disclaimer
Trading in the off exchange retail foreign currency market is one of the
riskiest forms of investment available in the financial markets and suitable
for sophisticated individuals and institutions. The possibility exists that you
could sustain a substantial loss of funds and therefore you should not
invest money that you cannot afford to lose. Nothing in this presentation is
a recommendation to buy or sell currencies and Interbank FX is not liable
for any loss or damage, including without limitation, any loss of profit which
may arise directly or indirectly from the use of Interbank FX tools or
reliance on such information.
Retail FX Market Opportunities
– FX remains the largest and most liquid market in the world
– Due to recent downturn of the global economy, investors are seeking volatility in alternative markets
– Increasingly electronic: 57% and 61% of all FX trading in Americas and Europe conducted electronically in 2006
Relatively untapped, rapidly growing retail FX market• Low penetration of retail FX with only 2% of overall
FX volume• Growing legitimacy as an asset class• Asia-Pacific leads the market with 38% of retail FX
trading volumes followed by Europe (31%) and Americas (26%)
Key growth drivers • Increase in cross-border transactions and demand for
currency hedging• Increase in internationally diversified portfolios• Acceptance of currency as a stand-alone investment• Efficiencies created by electronic trading have
reduced trading costs • Increased oversight of retail FX by the CFTC in the
United States has helped attract individual investors
Key trendsFX average daily volume
Average daily retail FX volume
CAGR +5%
CAGR +12%($ in billions)
($ in billions)
My Journey with FX• Ms. Reed’s experience in the foreign
exchange (FX) market spans 30 years on Wall Street with a number of financial organizations.
• Global client relationship manager and currency trader for Bank of America, Standard Charter Bank, Barclays Bank, and American International Group
• Helped launch Hotspot Fxi, an ECN utilized by the wholesale Forex community
• As Head of Sales for Lava Trading Ms. Reed worked to ensure customer focused solutions so clients would participate on Lava’s ECN product
• Peg is the Managing Director of Global Partnerships for Interbank FX
Retail FX and Leading Global Banks• Foreign exchange trading used to be
exclusive to investment banks, hedge fund managers and corporations
• The retail FX markets have a large variety of market participants compared to other capital markets. Also, unlike other markets, global FX is not limited to the systemic risk of one nation.
• How can FX add value to an investment portfolio?
- > Diversify your portfolio– Stocks and bonds even when varied by
country or industry tend to move in synch
– Fund managers often say “If the ups and downs are independent of other investments then it is an asset class”
– Reduces overall volatility of returns and drawdown periods
• Increased participation of the largest global banks in the retail FX market
– Citibank– Deutsche Bank – Credit Swiss– Goldman Sachs– UBS
Company founded by Todd Crosland
20022002 20032003 20042004 20052005 20062006 20072007 20082008 20092009
Revenue growth of 89% reaching $63 millionMonthly trading volume hits $80 billion notional value8 new currency pairs addedIncreased global liquidity providers to six world class firms
First Private-label partner
IBFX begins commercial operations as a registered FCM
Interbank FX LLC formed as a Utah limited liability corporation
Best Foreign Exchange Broker
Achieves 480%+ revenue growth for the year
Reaches $1MM in revenueCash flow positive
Emerging Elite, 2006
Revenue growth of 152%, reaching $15 million
Money AM 2008 Best Online FX ProviderShares Best FX Broker 2008Global Finance Best Retail Online FX Trading System
Revenue growth of 120%, reaching $33 million
20012001
35,000 customer accounts
Interbank FX’s Journey…
Spectrum acquires minority stake in IBFXLaunch of next-generation multi-bank order routing systemUnveils IBFX University
Interbank FX Corporate Quick Facts
Registered FCM, NFA Member
As of May 2009, adjusted net capital in excess of
38 million
Approximately 30,000 customers in 140 countries
Established Multi-bank liquidity
Multiple trading platforms
Sophisticated IT solutions
Revenue growth of 92%
EBITDA margins in excess of 50%
Over 80% of customer accounts from direct
marketing
Milestones
• Annual revenue growth of over 3,200% since 2004• Compound annual revenue growth for the last four
years of over 480 percent• Over 30,000 customer accounts• Supports trading volume of $80 billion per month• Notional one-day trading volume of more than $11
billion (June 30, 2008)• Current Net Capital in excess of $38 million• 2009 Inc. 500 – Fastest growing FX company
• Multi-bank Liquidity Feed• 100% automated order execution • Smart routing to leading banks• Streaming Dow Jones news feed• Anonymous Order Execution• Competitive spreads (spreads are not fixed and will fluctuate with market volatility)• Award-winning “customer centric model”• Extensive online education• An array of free trading tools• Standard, mini, micro and nano lots
Why Customers Trade with Interbank FX
Benefit From Interbank FX’s Multi-bank Liquidity Feed
“…this business model highlights the underlyingcommitment that you can provide to provide your
customers with the best tools, education and executionpossible…”
Interbank FX Offers: • Competitive Pricing from multiple leading global
banks• Access to daily reports and rebates • No management fees, start up costs or licensing
fees • Award winning “customer centric model”• Anonymous Order Execution • 100% automated execution • Smart routing to providers• Competitive Spreads* • *Spreads are not fixed and will fluctuate
with news or other high/low volume conditions.
FREE Trading Tools
• Real-time News: Dow Jones Select News Feed• International Economic Calendar• Patterns Recognition Systems (PRS)• Power Stats (Basic & Advanced)• Daily Pivots • Candlestick Pattern Recognition (CPR)• Instrument Monitor • MACD Traditional • Waves• Quick Scripts• Mini Monitor • Partial Close Expert Advisor
Fully Branded Online University
Free, comprehensive forex education website customized to address all your clients Assembled with essentially one objective in mind: the need to provide those interested in currency trading a place where they can learn foreign exchange trading conceptsDesigned to provide content to a broad range of tradersCourse content includes the following sections:
– Introduction to the Forex Market– Technical Analysis– Fundamental Analysis– Trading Strategies– Platform Trainings– Programming– Market Analysis– Guest Courses
Thank youfor your time and interest in
If you have further questions,please visit our booth or visit our website
www.interbankfx.com