ThinkMarkets is a name to watch. Online has become a huge international business in recent years, particularly over the last year when a new generation of online traders swarmed the market and, in at least one case, brought the mighty hedge funds to their knees over the infamous Gamestop shorts.
ThinkMarkets is a relatively new arrival to the online broking scene in SA, but has been around for over a decade internationally, and is certain to shake up the industry with its proprietary trading platform, low fees (zero in some cases) and wide range of tradeable assets, which now includes JSE equities, ETFs and ETNs.
Once the company secured its Financial Sector Conduct Authority licences in 2019, it dipped its toes into the local market and started signing up clients.
“We had been operating in the Asia-Pacific region and Europe for a number of years and it became obvious that there was a market in South Africa for what we were offering,” says Faizan Anees, ThinkMarkets director and co-founder. “We looked at the market in SA and saw there was an opening for someone offering very low fees and a wide range of tradeable instruments.”
Born and raised in Chicago, Anees first got involved in trading prior to the 2008 financial collapse. The wild gyrations of the market during a financial collapse is pure adrenalin to a young trader, but the fees were often outrageous and online broking services were crude and inefficient, limited to currency pairs, CFDs and equities. To switch between metals, CFDs and equities, you had to switch between brokers. No one was spanning the spectrum of tradeable assets and making them available on a single platform.
The decision to go global
Anees and his brother Nauman, ThinkMarkets CEO and co-founder, saw an opportunity to fill this gap, and in 2010 launched a company called ThinkForex based out of Chicago, focusing on currency pairs. The company then set up an office in Melbourne, Australia, which served as a beachhead into the Asia-Pacific markets. The after-effects of the global financial crisis were still unfolding, but by 2014 there was a decisive turn in global markets, and a renewed spurt in online trading and investing. The company then decided to tackle the massive European market, and applied for a Financial Services Authority licence in London, which was at that time part of the European Union.
In 2015 Anees relocated from Melbourne to London to guide the European growth spurt. A major milestone was the acquisition in 2017 of a mobile trading app called Trade Interceptor, and with that came nearly 90 000 active traders. This was a multi-broker app that allowed traders to switch seamlessly between different brokers to take advantage of lower costs on different trading instruments and markets.
The Trade Interceptor acquisition pushed the total client base into thousands. The mobile app was freshened up and rebranded ThinkTrader, allowing traders to execute trades across multiple asset types and markets from their smart phones.
Targeting significantly more active traders in three to four years
Though ThinkMarkets has several hundred thousand accounts, what really matters is the number of active traders – roughly 50 000, says Anees, though the target is to grow this significantly in the next three to four years.
In March this year, ThinkMarkets was named Best CFD Provider at the City of London Wealth Management Awards.
“What we have seen during Covid is a strong interest in online trading, for a number of reasons. Markets have been volatile and that is something that short-term traders like, so they have been extremely active. I also think people stuck at home during Covid are looking for things to do, and a whole new generation has discovered trading and investment. For the more traditional, long-term investors, the last year has also been exceptional in terms of the opportunities available. I don’t see this trend stopping. What is encouraging is the number of younger people entering the markets and educating themselves about stocks, bond notes, cryptocurrencies, commodities and other types of investment.”
Anees adds that retail investors are understandably concerned over the behaviour of some overseas brokers like Robinhood which restricted trades on stocks such as GameStop, after a Reddit community of traders called WallStreetBets put the squeeze on hedge funds shorting the stock and sending the share price rocketing. The short sellers, mainly big hedge funds, were forced to liquidate their positions to limit the bleeding, and Robinhood was accused of market interference by its own customers. Anees says customers should have no fear that ThinkMarkets would act against its own customers in this way: “We never have, and we never will act against customer interests by restricting trades in the way Robinhood did.”
ThinkMarkets in a nutshell
Asked how ThinkMarkets plans to take on what many might consider an already crowded online brokerage market, Anees points to the following:
- Tight spreads, low to zero commissions and a variety of account types, tailored to client preferences and needs;
- A company licensed in Australia, the UK, Japan and South Africa;
- The ability to trade across multiple asset classes, including CFDs on currencies, CFDs on equities, cryptocurrencies, commodities, indices, futures and now JSE stocks;
- A proprietary mobile trading app, ThinkTrader, that allows clients to trade and manage their positions from their smart phones. The trading engine uses the latest technology to provide the best pricing and execution speed;
- Client funds are held in segregated trust accounts;
- Zero commission for CFD shares both locally on the JSE and international shares, Indices and crypto currencies;
- Investment in all JSE shares, ETFs and ETNs with brokerage at 0.25% minimum R30. Premium clients investing over R250 000 receive exclusive benefits and pricing.
To find out more or sign up, click here.
Join ThinkMarkets in its upcoming webinar on Tuesday, April 13 at 6pm. It will show you how investing works and help you on your journey to wealth creation. You can register to attend here.
Brought to you by ThinkMarkets.
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