Sunday 28 June 2009

ICAP Buys Traiana As Forex Industry Consolidates

ICAP Buys Traiana As Forex Industry Consolidates

ICAP, one of the world's leading wholesale brokers, have moved to buy the Forex provider Traiana for a total of $247,000,000 US dollars ($9,000,000 in shares, $238,000,000 up front). The buyout represent a major recognition of growth for the retail and wholesale Forex markets and the traders who support them.

Toronto, Canada (PRWEB) June 28, 2009 -- InvestTechFX the leading 1 PIP Forex Corp offering MetaTrader4 reported on the acquisition of Traiana by investment and broker giant ICAP. InvestTechFX's industry specialist commented that there were several likely motivations for the buyout, including but not limited to an overall recognition of the expanding market share of the Forex industry and the potential it has for competition. InvestTechFX's specialist commented that as with any immerging market, the established players in the industry will push to be the first with their foot in the door. At present, the wholesale and retail Forex markets are exploding with new participation and liquidity, and it is not going unnoticed by independent investors.

InvestTechFX the leading 1 PIP Forex Corp offering MT4 noted that the buyout will mean a significantly strengthened trading infrastructure and liquidity network for Traiana, which already had a network of over 50 banks that all provided liquidity for the Forex trading that Traiana supports. Traiana, like most Forex brokers, depends mainly on the number of trades that are executed by its account holders. The arrangement is straightforward; individual traders or organizations deposit money into a special trading account that Traiana provides, and can then use Traiana's clearing connections, communications support, and trading software to execute trades in the lucrative online foreign exchange market. All this does come at a price; Traiana (and most brokers) imposes a fee on each trade that is made. The more trades that are made, the more money Traiana brings in. Traiana's profit increase of over 40% from 2007 to 2008 illustrates the extent of the Forex expansion, and provides more evidence for why Traiana was such an attractive investment for the London-based ICAP. Through this merger, Traiana has a an opportunity to solidify a position as a true world-leader in Forex trading.

InvestTechFX the leading 1 PIP Forex Corp offering MT4's industry specialist explained that such mergers can have positive and negative log-term effects for private Forex traders. As retail Forex trading is a developing industry, there is not always an efficient communications and clearing infrastructure in place to facilitate trading, which can result in increased trading expenses being passed on down to end-users (the actual traders trying to participate in the market). Larger Forex providers with better clearing networks can execute trades more efficiently. In markets like Forex trading, several billion dollars are spent every year simply processing the trades. There is, however, another side of broker consolidation that can work against traders- the potential for monopoly and reduced competition. There are currently several hundred Forex brokers available to traders all over the world, all competing for new and existing traders. This competition drives down the spreads, commissions, and fees that traders are charged. For traders who target very small gains, these charges can make the difference between profits and losses. Though it is more of a long-term threat, a monopolized and over-regulated industry can inflate costs and strip the financial fertility of the market. If it becomes too difficult for private traders to turn profits in Forex, they will take their investments elsewhere, and the market will dry up.

InvestTechFx the leading 1 PIP Forex Corp offering the MT4 trading software noted that this acquisition was not made in isolation; ICAP has been increasing its expansion into electronic and phone-based brokers progressively over the past 3 years. InvestTechFX's specialist cited that the move is part of a larger industry trend toward increasingly automated and internet-based brokers who take advantage of the internet to bring trading execution power directly to the traders themselves, reducing the necessary middle-men and bureaucracy that have inflated the operational expenses of traders for years.

InvestTechFX is a No Dealing Desk (NDD) and Software Solutions Corporation. InvestTechFX offers a 1 PIP fixed spread on 6 major currency pairs, as well as a comprehensive system of account groups, including scalping, interest-free, and VIP accounts. InvestTechFX is not a market-maker, and never takes positions against traders. More information on Forex markets, trading strategies, and financial anaysis is freely available through the InvestTechFX website:

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