GAIN Capital Holdings, Inc. provides trading services and solutions, engaging in over-the-counter (OTC) and exchange-traded markets.
The company serves customers in approximately 180 countries worldwide, and it conducts business from its offices in Bedminster, New Jersey; New York, New York; Chicago, Illinois; Powell, Ohio; London, England; Tokyo, Japan; Sydney, Australia; Shanghai, China; Hong Kong; Dubai, the U.A.E.; Krakow, Poland; and Singapore.
Segments
The company operates through Retai...
GAIN Capital Holdings, Inc. provides trading services and solutions, engaging in over-the-counter (OTC) and exchange-traded markets.
The company serves customers in approximately 180 countries worldwide, and it conducts business from its offices in Bedminster, New Jersey; New York, New York; Chicago, Illinois; Powell, Ohio; London, England; Tokyo, Japan; Sydney, Australia; Shanghai, China; Hong Kong; Dubai, the U.A.E.; Krakow, Poland; and Singapore.
Segments
The company operates through Retail and Futures segments.
Retail
This segment conducts its retail business primarily through its FOREX.com and City Index brands. The company provides customers worldwide access to approximately 15,000 worldwide financial markets, including spot foreign exchange (forex), precious metals trading, as well as contracts for difference (CFDs), which are investment products with returns linked to the performance of underlying assets. It offers CFDs on currencies, commodities, indices, individual equities, cryptocurrencies, bonds, options and interest rate products. In the United Kingdom (U.K.), the company offers spread bets, which are investment products similar to CFD. The company offers these products under the regulatory environments in which it operates.
The company’s primary direct channels for its retail segment are its Internet websites, FOREX.com and Cityindex.com, which are available in multiple languages, including English, Chinese, Japanese and Arabic. Its indirect channels include its relationships with introducing brokers, who solicit customers on its behalf, and white label partners, who offer its trading services to their customers under their own brand.
The company has made significant investment in developing and supporting its proprietary trading technology to provide its customers with a customer experience and multiple ways to trade and manage their accounts, tailored to their level of experience and preferred mode of access. In addition, it offers third party trading tools.
The company has developed proprietary technology to handle various aspects of account onboarding and customer service, including the account opening and customer verification process, online account funding and withdrawals with various automated payment methods, and on-demand delivery of customer information, such as account statements and other account-related reporting. The company also offers account opening and funding functions on its mobile trading applications to provide an experience to the large number of customers who trade primarily through their mobile devices.
In addition to automated processes, the company actively monitors and assesses various market factors, including volatility and liquidity, and take steps to address identified risks, such as proactively adjusting required customer margin (both initial and maintenance).
Customers
The company’s retail customers primarily consist of self-directed traders, who execute trades on their own behalf. Its self-directed customer is comfortable making trading decisions and is specifically interested in trading leveraged products, which have a higher risk/reward profile.
Sales and Marketing
The company works with introducing brokers to expand its customer base. It works with various different types of introducing brokers, ranging from small, specialized firms that specifically identify and solicit customers interested in forex and CFD trading, to larger financial services firms. The company also offers a worldwide affiliate program to which third parties refer customers to it in exchange for a one-time payment.
Futures
This segment offers execution and related services for exchange-traded futures and futures options on major U.S. and European exchanges. The company clears its customers’ trades through its regulated Futures Commission Merchant, GAIN Capital Group, LLC. Also in the futures segment, the company operates Global Asset Advisors, LLC (GAA) and Top Third Ag Marketing, LLC (TT). GAA is a Chicago-based futures brokerage firm, which principally markets to and services clients under the Daniels Trading brand. GAA is an introducing broker targeting retail and professional traders, primarily in equities and agricultural products. TT, also an introducing broker, uses options-based hedging strategies to help clients manage the risks of agricultural production. The company purchased majority interests in both GAA and TT in 2014. It acquired the remaining minority interests in GAA and TT in stages.
The GAIN Trader platform has a suite of trading tools, including charting tools, custom alerts and indicators, as well as automated trading and risk management tools. Its futures segment also provides Trade Desk Manager, a version of its GAIN Trader platform offered to introducing brokers, which allows them to manage their customers’ accounts. In addition, it facilitates connection to its trading services through Application Programming Interface from other front-end applications, and it licenses a white label version of its GAIN Trader platform to select third parties.
Strategy
The key elements of the company’s strategy include leveraging its worldwide footprint and powerful brand assets to increase its overall share in the markets it operates; introducing new, innovative products and services, including upgraded and enhanced trading platforms and decision support tools that enhance the customer experience and improve competitive position; optimizing its marketing investment to drive new account growth and asset gathering; and improving client onboarding to increase acquisition results.
Sales and Marketing
The company’s principal source of new customers is a large network of introducing brokers.
Competition
For its introducing-broker business the company’s major competitors are RJO'Brien and ADM Investor Services, and to a lesser extent Rosenthal Collins Group.
The company’s direct full-service business is concentrated in the agricultural hedge sector where it competes with Allendale, Advance Trading and Roach Ag Market, as well as various boutique smaller rural introducing-brokers. For its self-directed, direct business, it competes with Interactive Brokers, TD Ameritrade, E*Trade Financial Corporation and TradeStation.
Intellectual Property
The company relies on a combination of trademark, copyright, trade secret and unfair competition laws in the United States and other jurisdictions to protect its proprietary technology, intellectual property rights and its brands (FOREX.com, GAIN Capital, and City Index).
The company uses various service marks that have been registered with the U.S. Patent and Trademark Office, including: GAIN Capital (registered service mark), GAIN Capital Group (registered service mark), Forex Insider (registered service mark), ForexTrader (registered service mark), FOREX.com (registered service mark), It’s Your World. Trade It. (registered service mark), GAIN Capital Futures (registered service mark), and GAIN Futures (registered service mark). It also has registered trademarks covering its City Index brand name and logo in various jurisdictions, including Australia, the U.K., European Union, Singapore and China.
Regulation
In the United States, the Commodity Futures Trading Commission and the National Futures Association regulate the company’s forex and futures trading activities. Primarily, the company is subject to the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, which requires that the company maintains an anti-money laundering program, a customer identification program, designate an anti-money laundering compliance officer, provide specified employee training and conduct an annual independent audit of the company’s anti-money laundering program.
History
GAIN Capital Holdings, Inc. was founded in 1999. The company was incorporated in Delaware in 1999.
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