It is Sunday evening in Warsaw. People are still enjoying their weekends in big malls and fancy restaurants across the city and commuters are crowded on the roads to the city. Most of the sky-scraper aspirants in the centre are still asleep but there are few lights already on at the Warsaw City Gate building. As all the information from the weekend is being digested by the stomach of supply and demand, first trades are being made. It is Asia’s call for bulls and bears around the globe… Monday 7am – the heat is on. First comments flow in front of the sleepy eyes of traders in Frankfurt, Paris and London. First decisions are being made and a few directions are being set. Following that, trading on the Polish zloty and other local currencies intensifies. Eventually, at 9am the Warsaw Stock Exchange begins trading stocks. Some of the thrill is down around a lunchtime. Stay vigilant though, the Americans are yet to show up. Finally at 3.30pm the NYSE bell rings and the party is officially started. Welcome to X-Trade Brokers – the leading forex broker in Central Europe.
The name of the broker is not hard to spell compared to many other Polish brands. Yet, you can take it shorter – just the XTB where each of the letters depicts the recipe for success of this company.
X-alternatives
You can’t trade everything that moves but why would you not trade anything? Or at least the things that are worth trading? Many brokerage houses oriented at individual investors traditionally traded some selected securities, e.g. stocks. This is actually one of the reasons why forex brokers became popular among individual investors. Taking advantage of a widespread popularisation of the Internet, they have opened a completely new possibility to a large group of investors. Until this, they were locked into stocks, passive bond holding or trading a limited number of contracts on regulated markets at best. In other words, investment opportunities reserved for banks and large institutional investors were offered to individuals. Then again, many forex companies offer a relatively narrow range of products, failing to address the need of individual investors who would like to have numerous investment alternatives offered by one broker, preferably on one trading platform.
Some offers are brought down to currency pairs of developed countries, sometimes topped with CFDs on oil and gold, and perhaps a few major US stock indices. XTB goes far beyond that. On the forex front, a customer can trade not only majors and main crosses but also a nearly full universe of tradable emerging currencies.
These pairs often offer different trends and appeal to different investment techniques. While forex with the queen Ä-$ pair is as core as anywhere else, a customer does not need to be confined to currency pairs. Commodities are not just bait. Popular gold and oil CFSs are just the tip of the iceberg, filled with a full list of softs, industrial and precious metals and even such niche commodities as lean hogs or cotton. Those specific markets very often offer strong trends based on volatile supply and demand balances. Take sugar for example.
A drought in India and excessive rainfalls in Brazil caused a deficit of the commodity resulting in a rise of price from 12 to nearly $27 per quintal. With a 100 leverage that is up to 12500 percent return. What is more, some customers want to combine their currency and equity exposures. For those clients the company has prepared a full array of choices. That includes CFDs on all major stock market indices and indices from emerging markets (including hot movers in Brazil and China). However, investors may choose from an impressive selection of CFDs on single stocks. Even though the company underlines benefits of the OTC markets, customers have a possibility to trade on stocks and contracts on regulated markets as well. XTB is offering customers CFDs on bonds and it has nothing to do with the way individuals treated bonds before. XTB’s customers were able to take advantage of the massive flight of capital to the US treasuries and German bunds in late 2008. Just like in the currency trading, small changes of interest rates compounded by duration and high leverage translate into a huge profit potential.
Furthermore, there is more when it comes to instruments. Typical CFDs offer a linear risk profile. This is different in case of options. If an investor is looking for even more elaborate risk profile structures he may well combine CFDs with options to achiev
e that. Some solutions for those looking for less typical trades are given by the broker and they include binary and digital options. The company is looking forward to delivering the latest technology benefits to its customers. DMA (direct market access) is an example of that and still rather a unique position among forex brokers. This technology combines the transparency of regulated markets with the benefits of OTC markets when it comes to leverage and range of investment possibilities.
Training
Leverage is not something to trifle with, especially when it goes into triple digits. XTB began to apply MIFID guidelines long before they were implemented in Poland. But sticking to the legal procedures could not be enough. The company wants investors to feel comfortable on the market and predominantly see them making money. This results in an unmatched range of educational activities, far beyond a typical demo account. The educational workshops constitute the background where investors may learn everything from the basic technical analysis to the new fancy charting techniques and applied fundamental analysis. Those who cannot attend may take advantage of so called webinaries – more day to day seminaries with a market update made via the Internet communicators. The company fulfills its role as an educator cooperating with the Association of Individual Investors, thus being close to the people, their demands and expectations. XTB has also released a book on foreign exchange not only to guideline investors but also to advertise the market as the company believes that it still did not get the attention it deserves. Last but not least, regional branches of the company are renowned for their foreign exchange cups. Branches arrange a competition where thousands of participants attempt to obtain the highest possible rate of return from the initial deposit on the demo account. While the winner drives away in a fancy sports car, the aim here is foremostly to encourage people to apply their knowledge to the reality of the market. In fact, the company is aware that this process will bring mutual benefits as the forex market for individuals is maturing. What is interesting, all that takes places on the local markets, but this is just another cornerstone of the company’s success and stands behind the letter B.
Business model
Take a role model forex broker out on the market. What you have is a platform, the internet web page and headquarters often located in a tax haven. While this does not need to be bad for an investor, XTB took a different approach − it is present on each market where it offers services. So far the branches can be found in Poland, Germany, Spain, Czech Republic, Slovakia, Ukraine, Romania as well as in China, and India is about to follow soon. A customer service in local languages is a standard but this is more than just account management issues. The XTB staff is in all of those countries making workshops and meeting people across the country, commenting on markets and obviously providing news and research in local languages. You might think that currency trading is the same everywhere, but actually the company admits that investors are different in every country. Therefore their expectations may differ as well. Moreover, some investors have a preference towards certain domestic assets and may demand an expanded research devoted to those which XTB provides. Local presence of the company is a chance to meet people but it is also a chance to participate in everything concerning the market. The broker is actively represented in the business media, creating the whole surrounding around forex, stocks and commodities trading.
Being obliged by MIFID and being in accordance with EU law is beneficial for the customer as well. Those regulations require brokers to ensure that customers are aware of the risk they are taking. As mentioned before, the company goes beyond that when it comes to education and risk awareness.
Friday afternoons are crowded on the streets of Warsaw. People get out of work and pour to their homes, to the countryside for the weekend and to the shopping malls. You can feel an atmosphere of relaxation. But as Asians have already fallen sleep, Americans have just started the trading. As they end the trading week it’s going to be a late night in Warsaw. Offices will be empty but a few lights at the Warsaw City Gate will still be on. They are here so you can trade.
