Although it may not be related to Forex trading, it is still massive news for an Australian brokerage to offer something like commission-free trading. Monex Securities has been pondering over implementing something new to attract local as well as foreign customers. The implementation of a commission-free platform was an ideal solution. Thanks to the addition, the brokerage will now be able to cater to the United States and South East Asia based customers without any problems. Furthermore, it will either force its competitors to adopt a similar platform or slowly be ousted from the market.
Should this make Forex brokers nervous?
Even though stocks and Forex are two completely different assets, the markets are very similar. It is still trading and it is still financial, therefore there is always something to be learned from their counterparts. Losing customers to a competitive market is not unheard of and most of the Forex trading brokers listed here by InsideBitcoins should consider the occurrence now that there is such an attractive offer from Australia.
The keyword is most of them as not every Forex brokerage has a commission-based trading system. There are some who are able to afford profits just from the spreads. Nevertheless, Monex’s addition to their platform could revolutionize the markets as trading becomes more and more accessible and profitable to the traders rather than the brokers. But, many believe that the lowering of market entrance prices will attract more customers, which in turn will mean more revenue for the companies. However, that is debatable unless one large Forex broker takes the first step.
Impact on the market
Despite the fact that the addition of this new feature could be a challenge to Australian and South East Asian brokers, it’s not going to have serious ramifications on the overall global market. Seeing how Australia holds no more than 3% of the global market capitalization, the effect that commission-free trading can have on it is extremely low. As brokers will have to look at their statistics and compare them to Monex’s after a couple of quarters or so. In order to truly determine, whether or not its worth to implement such a feature.
As it stands, brokers are extremely unlikely to adopt this feature in the near future. In fact, it is unlikely that Monex themselves will see an increase in the customer base, nor the revenue. At least not this year. Therefore Forex, CFD and Stock brokers can rest easy, knowing that nothing much will have to change.