Devexperts has announced that it will add US futures on crypto, forex, indices, and commodities to DXtrade’s prop trading capabilities.
DXtrade is Devexperts’ flagship white-label trading platform for brokers. DXtrade XT, which is available off-the-shelf or as partly or fully customizable, will now enable prop firms to offer US futures to their clients around the world.
“There is high demand for futures trading technology”
Jon Light, Head of OTC Platform, commented: “There is high demand for futures trading technology, with the high growth prop segment exploring new horizons. As such, we are happy to be able to offer US futures contracts, in addition to our CFD capabilities. Devexperts is in a unique position, offering futures data from dxFeed in addition to trading functionality. We also stand out through our ability to guide clients into the brokerage business with advice and expertise.”
Proprietary trading firms provide traders with the opportunity to invest using the firm’s capital. Traders who succeed earn a share of the profits, while the firm retains a portion. To assess a trader’s potential, firms often use virtual funds to evaluate their performance in a challenge.
DXtrade’s trading simulator helps firms manage these challenge accounts through their prop trading CRM/Portal, which integrates via API. Available risk settings include maximum account position limits, custom trading day schedules, and automatic liquidation of open positions at session end.
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The platform allows real-time monitoring of traders’ performance and rule compliance. It also supports account creation, transactions, and group management.
Additionally, DXtrade offers access to dxFeed, a data solutions and index management provider by Devexperts. This includes Level 1 and 2 US and EU futures data, along with compliance and subscription management support.
According to Devexperts, DXtrade can be set up within weeks and includes a dedicated account manager. The platform is accessible on both web and mobile, featuring quick order entry, position monitors, trading journals, and advanced charting. Supported order types include stop market, stop limit, and trailing stop.
Devexperts’ Evgeny Sorokin on opportunities within prop trading space
A recent feature article by FinanceFeeds delves into the opportunities arising within the prop trading space. Among others, we spoke with Evgeny Sorokin from Devexperts, who pointed out that prop trading opens up new audiences previously unreachable, thanks to the lack of regulation around aggressive marketing for contests and simulated trading. This opportunity for growth comes with the added benefit of potentially increasing the overall size of the market for the industry.
“An attractive window of opportunity has opened up in the prop trading space — particularly for retail brokers,” Soroking said. “The lack of regulation around aggressive marketing for contests and simulated trading means brokers can tap into new audiences that weren’t reachable before. Trading competitions flatter the intellectual gamblers, those who consider themselves to be the elites of the trading world. These individuals pride themselves on their extensive market knowledge, viewing themselves as the experts.
“In many ways, traders who participate in evaluations and contests are similar to the traders who are engaged with retail forex. Brokers are very much accustomed to serving this clientele. Funded programmes grow the overall size of the pie for the industry. Some of the contestants will stay in trading even if the prop saga ends,” Soroking continued. “The firms that are used to adapting to maintain a competitive edge will be able to take advantage easily by offering a slightly different product. Only a gentle adjustment rather than a loud change would be required. The perfect scenario for brokers, right? However, firms will need to tread carefully and weigh up several risks.”
The Devexperts executive kept going: “Let’s start with the obvious: compliance. If the regulator deems props unfit under the new framework, the firms could be outlawed overnight. Brokers looking to invest in the creation of a prop trading wing will need to consider how they feel about this Sword of Damocles.
“On the other hand, if the broker is experienced, they have a mature operational structure with reliable marketing, sales, compliance, dealing, and other functions. They have mastered trading platforms, CRMs, MIS, BI, and back-office software. They have a web of PSPs, LPs, etc. In this case, launching a retail prop is an exercise with a working weight. So shutting it down shouldn’t hurt too much, as the firm is back to their core brokerage business. The investment in this product would still be written off though, and the loss could be significant.
“On the other hand, prop trading firms come in so many shapes and sizes: market signals, competitions, etc. As long as trading on demo accounts is permitted, it’s really hard to define what the prop trading business is, and therefore, hard to ban it. Regulatory bodies will be implementing new controls, and props will be encumbered with processes and reports. This will inevitably lead to breaches, with corresponding penalties. Brokers need to decide if they want to open themselves up to this scrutiny.
“Prop trading is currently shrouded in marketing that sometimes pushes alluring golden ticket-style campaigns, attracting a certain type of customer, and thus creating a certain type of stigma.
“In the same way that a gambler with poor strategies or irrational expectations tends to be vocal towards the house when they lose, calling ‘‘scam’’ from the rooftops; inexperienced traders who are disenchanted with prop firms because they were banking on fast returns, create a cloud of negativity over the industry.
“Then there are bad actors. We saw this dynamic play out with ICOs and binaries, and again with retail traders during the rise of forex and crypto trading. “The broker’s reputation will need to hold up and be ready to withstand fires of this nature. One could argue that props could be launched under a different brand — a kind of damage control. We see that many retail brokers conduct their funded trading programmes under a separate entity and a brand.
“Finally, there are risk management challenges. Risk management is often overlooked in the unregulated and synthetic environment. Mistakes in the platform configuration, loopholes in the trading terms & conditions, or lack of risk management policies, may bite you, especially when the market suddenly moves. The firm may suffer from unexpected payouts or losses that they never projected or accounted for.
“Additionally, many systems that are currently in use are tailored for regular trading, and while there is a big intersection with props setup, risk management is one field where nuances matter the most. While the prop trading playing field has undeniably evolved into a favorable environment for brokers, firms will need to consider their threshold for withstanding the fallout associated with the risks laid out here.”
