e-FX Awards 2020: Best prime-of-prime broker and best retail FX platform – Saxo Bank

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Saxo Bank’s extensive financial instrument offering and unrivalled access to the world’s markets attracted multitudes of professional traders to the prime-of-prime and retail broker in the tumultuous first half of 2020

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Peter Plester, Saxo Bank

Faced with turbulent and volatile markets, large numbers of professional traders in the first half of 2020 were on the lookout for a partner that could offer stability and top-notch access to financial markets.

This year, many of these found their home with Saxo Bank either to establish a new credit relationship or to take advantage of the broker’s large selection of financial products.

The bank’s sizeable balance sheet was particularly attractive to professional traders looking for a credit intermediary with ample capital to back them up.

“When a relatively large client looks for a prime-of-prime as their credit intermediary, they want to make sure that the amount of collateral they place with that prime broker is not too big in relation to the capital and size of that entity,” explains Peter Plester, head of FX prime brokerage at Saxo Bank. “Larger clients need a larger, well-capitalised entity to use as their credit intermediary.”

But smaller investment firms have also flocked to Saxo Bank this year. The prime-of-prime broker witnessed a significant increase in its client base throughout the course of the year.

Many traders favour trading with the bank because it offers a wide range of instruments to trade, and provides connectivity to some of the largest electronic communication networks (ECNs) in the FX industry and 30 bank and non-bank liquidity providers.

“There aren’t many prime-of-prime brokers out there that offer clients access to ECNs,” says Plester. “We’ve worked very hard with [connectivity provider] MarketFactory to develop an ultra-low-latency product, giving clients the ability to trade on ECNs with the benefit of super-fast pre-trade risk controls.”

Depending on their requirements, Saxo Bank’s clients can create bespoke liquidity pools on an anonymous or semi-disclosed basis – an attractive feature to many prime-of-prime clients, who are increasingly keen to trade bigger tickets in full amounts directly with liquidity providers.

By trading large clips with liquidity providers, traders at Saxo Bank – which generally trades in clips of $10 million and above – don’t have to sweep the book on a particular venue and face the unpleasant conversations this entails.

“Trading full amounts works very well for clients in that they end up with a much more solid relationship with the liquidity providers, and it works well for the liquidity providers because it creates less market impact and helps them to monetise their flow,” explains Plester.

While Saxo Bank has traditionally focused on FX, the broker has dramatically extended the breadth of its offering over the years. Today, it offers more than 40,000 financial instruments spread across FX, equities, bonds, exchange-traded funds, contracts for difference (CFDs), futures and options.

Saxo Bank’s prime brokerage clients began to broaden their trading portfolio in earnest when volatility in FX reached all-time lows in the past 18 months, and that trend continues to gather pace.

“Many clients are becoming interested in diversifying their product range into stocks, bonds and options, etc,” points out Plester. “But there are very few brokers who can facilitate access to exchanges, markets and products in such a wide range as Saxo Bank, and which benefit from a huge team of people that do a sterling job in the background.”

Saxo Bank, which was voted best prime-of-prime broker and best retail FX platform at the 2020 FX Markets e-FX Awards, also saw a dramatic increase of client inflow in its retail operations.

A total of 80,000 clients opened accounts in the first half of 2020, bringing the group to a record high of more than 620,000 clients.

“Market volatility is always a driver for new clients,” says Henrik Dyrholm Holst, head of trading platforms at Saxo Bank. “A second reason is that we offer an unparalleled instrument universe providing ample hedging opportunities that are not found with traditional brokers in our local markets. Our customers can hedge their overall exposure and currency risk with FX derivatives such as futures, options or CFDs and protect themselves against the type of volatility and downside we saw in the market around March and April.”

Customers can choose to conduct these trades and hedges on Saxo Bank’s two trading platforms – SaxoTraderGO and SaxoTraderPRO – or via the mobile app, and thus access their accounts from any device. 

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