One of the unexpected side-effects of the COVID-19 pandemic has been an increased level of interest in trading in financial markets. Market volatility combined with lockdowns and financial uncertainty has caused many people to turn to financial trading for the first time.
As a result, platforms that offer trading services have won big throughout the year. Even as the COVID-19 vaccine becomes increasingly available and the virus loses its grip on global society, it’s likely that trading will continue to maintain its newfound popularity.
Margin trading may be of particular interest to certain people because of the potential that it has for high profits.
Therefore, while there are a number of trading platforms currently available for end-users, there is still a lot of potential for new players to enter the market.
Recently, Finance Magnates sat down with B2Broker’s Andrew Matushkin and Denis Umanets to speak about the current market situation as well as B2Margin, a new product that allows its users to set up a margin exchange within as little as three weeks.
Andrew Matushkin serves as the product manager for B2Margin at B2Broker, while Denis Umanets is the company’s head of products.
This is an excerpt that has been edited for clarity and length. To hear the full webinar, including a demonstration of B2Broker’s margin trading solution, visit us on Soundcloud or Youtube.
COVID-19 has created a unique set of circumstances and opportunities for financial markets
We asked Denis and Andrew why the current moment in time is a uniquely good opportunity to start a margin exchange.
Andrew said that the current situation in the market is “not a secret:” that “we all know what the current situation in the world is, with all of these COVID-19 measures, with the lockdowns; people are losing their jobs.”
“And, of course, everyone would like to save their funds, and probably allocate their funds to make some profits on an everyday basis,” he added. Additionally, “when people get put into a lockdown, they have spare time to be able to learn what is currently hot in financial markets.”
As a result, a number of asset-trading platforms have seen massive increases in their number of retail users throughout the year. This trend has been echoed across the board in a number of asset-trading apps, including Robinhood and eToro.
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The COVID-induced market circumstances, combined with increased interest in retail trading, may have also led a number of new users into cryptocurrency markets this year. Andrew said that “crypto is a great opportunity for retail users to invest and to save their funds under these world circumstances.”
“That’s why the trading and crypto worlds have not suffered so greatly” from the economic downturn that has deeply affected other parts of the global economy for months.
“When we see that something is becoming more popular,” like crypto, “institutional brokers should take that into consideration.”
This increased level of interest from retail traders into financial markets–particularly crypto–is also important for institutional traders.
“When we see that something is becoming more popular,” like crypto, “institutional brokers should take that into consideration–that these upcoming trends will not end anytime soon.” Therefore, as time goes on, “the more profit potential” there is, particularly for those who can move quickly at this stage of the game: “there is exponential growth.”
Indeed, “this is a good time to start a brokerage business,” Denis Umanets chimed in.
“I believe a lot of people have started trading now. Therefore, all of these trading services become much more available–they are simple, the UI is more user-friendly”
Increased levels of interest in margin trading
We also asked Denis and Andrew about the idea that adding leverage trading solutions to platforms that already offer spot trading to their clients, businesses can boost their profit-potential.
“First of all, it’s significant for the number of potential clients that might enter your service or business, because there are not so many high barriers of entry,” Andrew said.
“Here’s what I mean by ‘high barriers’: if we’re speaking about pure spot trading, if I would like to trade on cryptocurrency exchanges that provide me with spot trading, I would need to get ahold of really cryptocurrencies, such as Bitcoin or Ethereum.”
However, “if we’re speaking about margin trading, which has been popular throughout history…people with lower equity can trade as if they have more than they really have. That’s why people are so interested in margin trading nowadays.”
“The key feature of this platform is that it’s very flexible.”
Andrew and Denis explained that this increased level of interest in both spot and margin trading is what led them to build their latest product, a scalable trading solution that they say anyone can use to “launch a margin exchange within three weeks.”
“This is for everyone,” Andrew explained, referring to the new solution. “The key feature of this platform is that it’s very flexible…in a nutshell, every single broker or user can create their own dedicated workspace” for traders of all different levels of ability, including newcomers.
The platform can also be altered at different points throughout a company’s journey: “let’s say that something has happened and your reorient your marketing strategy so that you are mostly interested in professional traders…no problem. You can set unique trading conditions for them, including unique trading accounts, unique trading platforms, and more.”
Andrew also explained that from a client perspective, “the platform is a web-based interface, so you don’t need to download any kind of additional software–you just need your laptop, your browser, and a connection to the internet to start trading.”
This is an excerpt. To see the full webinar, including a demonstration of B2Broker’s margin trading solution, visit us on Soundcloud or Youtube.