Smartphones Put Power to Deal Currencies Into Retail Traders' Hands

Advertisement
By Reuters | Updated: 21 October 2015 18:36 IST
Once the preserve of big international banks, smartphones are putting the power to deal currencies into the hands of a new cohort of traders, who can make a fortune or lose their shirt on the bus to work.

Retail foreign exchange trading has grown rapidly in recent years, but the image has been of a lone trader in front of a computer screen. Smartphones, owned by around half the world's adults, are changing that.

Mobile trading makes up about 60 percent of transactions, up from 10 percent four years ago, at London-based broker Trading 212, whose app has been downloaded over a million times. More than a fifth of clients trade only on smartphones or tablets.

"We are seeing a big number of clients who are not only mobile first, but mobile only," said Ivan Ashminov, Trading 212's co-founder.

Advertisement

Like others, Trading 212 offers demo accounts allowing users, largely male and mostly aged between 25 and 45, to practise with fake money. Many have no previous trading experience, Ashminov said.

Advertisement

Faheem Bismal, a 32-year-old father of two from Glasgow, sold his chain of convenience stores and restaurants two years ago to focus on property investment and trading currencies. He trades on broker FXCM's smartphone app on the school run and in bed before he turns out the light.

When he only traded on his desktop and could not check the market when he was out and about, he was less successful, Bismal said. But he warns that the ease and accessibility of trading apps can be dangerous.

Advertisement

"I see guys sitting on their phones just tapping away, being in and out of the market within seconds or minutes ... and losing all their money. If you're going to use the app you have to use it very sensibly."

In 2013, the Bank for International Settlements estimated the value of retail currency trading at about $185 billion (roughly Rs. 12,04,966 crores) a day, or 3.5 percent of the market. Industry analysis website Finance Magnates reckons that figure is now closer to $320 billion (roughly Rs. 20,84,265 crores). Smartphones, it seems, are helping drive growth.

Advertisement

Almost 40 percent of trading at IG, one of the world's biggest retail FX platforms, is done on mobile devices, up from around 20 percent three years ago. In April, the firm became the first to offer a trading app on the Apple Watch, which vibrates when a user-set price is reached.

Gamification
Some critics say "gamification" has made some trading apps appear more like harmless fun than opportunities to lose large sums. They argue it entices people with no knowledge of markets to expose themselves to risks of which they are not fully aware.

When the Swiss National Bank removed its currency cap in January, many retail traders suffered heavy losses, having held highly leveraged positions on the euro against the Swiss franc. Most of the retail traders Reuters spoke to about their losses had used smartphones for at least some of their trading.

But some argue that rather than encouraging reckless gambling, the new generation of apps, designed for smartphone users rather than modified from desktop sites, provide a less complex, safer environment for retail traders.

Flick A Trade is one trading app that looks and feels like a traditional computer game, complete with tense music and sound effects. It offers trading with "funny money", while in "real money" mode trading sessions are limited to GBP 3,000, with losses not able to exceed bets.

"Over the years I have seen numerous black swan events ... which wreck not only retail investors but many companies, big and small, offering leveraged trading," said Flick A Trade founder Kerem Ozelli.

Mobile trading apps can also give traders access to the same technology that until now has been reserved for the big banks.

"The lines between retail and institutional trading are becoming way more blurry," said Jannick Malling, CEO of Tradable, a company that allows users to trade directly from news and analysis apps rather than via a separate broker's app.

"Back in the day, only the institutions had access to the best tools in the marketplace ... and that's becoming completely democratised."

© Thomson Reuters 2015

 

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.

Advertisement

Related Stories

Popular Mobile Brands
  1. Diwali 2025 Gift Ideas: Mobile Phones and Gadgets to Give to Your Loved Ones
  2. Best Diwali 2025 Wishes, Quotes, and Facebook Statuses to Share
  1. Mysterious Asteroid Impact Found in Australia, But the Crater is Missing
  2. Thanal Comes to OTT: Everything You Need to Know About This Tamil Action Thriller
  3. Madam Sengupta Is Now Streaming: Know Where to Watch This Bangla Crime Thriller
  4. Ryugu Samples Reveal Ancient Water Flow on Asteroid for a Billion Years
  5. Scientists Create Most Detailed Radio Map of Early Universe Using MWA
  6. Mayor of Kingstown Season 4 OTT Release: Know When, Where to Watch Jeremy Renner's Crime Drama
  7. Our Fault Is Streaming Now: Know All About This Gabriel Guevara and Nicole Wallace Starrer
  8. The Conjuring: Last Rites Is Now Streaming Online: Know Where to Watch the Latest Installment from the Horror Franchise
  9. Delhi Crime Season 3 OTT Release: Know When to Watch This Shefali Shah Thriller Series
  10. Vast Space to Launch Haven-1, the World’s First Private Space Station in 2026
Gadgets 360 is available in
Download Our Apps
Available in Hindi
© Copyright Red Pixels Ventures Limited 2025. All rights reserved.