x Abu Dhabi, UAETuesday 23 January 2018

Abu Dhabi brokerage woos high-frequency traders with new platform

An Abu Dhabi securities brokerage is spending millions of dollars on technology to rival its international competitors in speed and efficiency

Day trading could be staging a comeback in Abu Dhabi.

As global markets rebound from the financial crash of 2008, an Abu Dhabi securities brokerage is luring wealthy, high-frequency traders to its new trading platform with the promise of greater efficiency and competitive pricing.

ADS Securities has spent tens of millions of dollars over two years to develop the first proprietary multi-asset trading platform in the region. Called OREX Optim, the trading platform has been built with high-frequency traders in mind.

While the platform is targeted at rich investors, ADS Securities is not excluding smaller traders, as the minimum amount to open a trading account is just US$10,000, according to Stephen Davie, an ADS Securities spokesman.

In the past year, the volume of currencies and gold traded daily on the firm’s platforms has increased to $8 billion from $5bn, raising eyebrows in the financial centres of the western world where such system innovations typically come from, according to Mr Davie.

European banks – which are reeling from Europe’s ongoing debt crisis, regulatory fines and downsizing – can no longer afford to splash out on customised trading systems for their clients and that has created an opportunity for the cash-rich Middle East region.

“We started a soft launch of the platform for forex [foreign exchange] six months ago and we will be rolling out other asset classes such as commodities and equities next year,” Mr Davie said. “Day trading is coming back.”

ADS Securities was founded in March 2011 with an initial capital of $400 million to exploit a gap in the trading of currencies and bullion between the closing of markets in Europe and the opening of markets in Asia. It now has thousands of professional traders as clients and is seeking to expand the number of institutions that use its trading platforms.

The firm, which also plans to offer investment banking services, is aligning with Abu Dhabi’s plan to create a financial zone on Al Maryah Island.

The zone is intended to be a hub for asset management and cater to sovereign wealth funds such as the Abu Dhabi Investment Authority.