“(Prop trading) value proposition to the client is
such that this has attracted a large number of users who never considered FX
and CFD trading before” Drew Niv, Chief Strategy Officer at ATFX Connect,
shared the comment when asked whether prop trading is good for the industry.
Speaking to Jonathan Fine, Content Strategist at Ultimate
Fintech, Niv, a long-time industry expert, defended proprietary trading as a
force for market expansion, even as he warned brokers to brace for a looming
wave of competition from neobanks and fintech giants.
He admitted that prop trading remains “mathematically
unsound” in many of its current incarnations, yet argued it has become a
crucial gateway for new entrants into the online trading world.
ATFX is a global online forex and CFD broker that
offers trading in currencies, indices, commodities, shares, and
cryptocurrencies via the MetaTrader 4/5 platforms and its institutional ATFX
Connect offering. The broker operates under the “ATFX”
co-brand across multiple regulated entities, including AT Global Markets (UK)
Ltd.
Niv acknowledged the model’s flaws — high churn rates,
inconsistent performance metrics, and patchy risk controls — but sees gradual
maturation. Early prop challenges, he explained, were driven “99.99% by luck,”
yet are now evolving toward more realistic trading conditions and skill-based
evaluation.
“But the problem was that initially the qualifying
rules of you won and you qualify for a quote unquote real account. Those rules
were too loose. And people essentially won by a lot. They’re still too loose,
but they’re getting tighter. The leverage restrictions are getting more.”
He likened today’s prop trading phase to the “wild
west” period preceding the rise of regulated retail FX two decades ago. The end
result, he suggested, will again be positive: “Just as retail FX expanded the
market 25 years ago, prop trading will bring in a fresh generation of traders.”
Drew Niv (left) during an interview with Jonathan Fine
Neobanks and the Threat of Scale
Niv struck a more cautionary tone when the
conversation shifted to neobanks like Revolut and Monzo entering the trading
arena. Drawing on FXCM’s experience in Japan — where internet
conglomerates like Rakuten and GMO wiped out hundreds of brokers — he warned
that the same dynamic could now play out in Europe.
“And what happened around those years is that the
large, essentially the Rakuten, which is like the Amazon of Japan, GMO. So you
look at all these Internet giants who had an endless amount of inventory from
online advertising, all of the stuff that they do. And a user base.”
“And therefore, they had a user base and a massive
brand. And their cost of acquisition was tiny. And they had to essentially say,
oh, if you open an account with us, you know, like Rakuten is a good example.”
Niv argued that brokers face a choice: specialize
regionally, expand into multi-asset offerings, or risk being outspent.
“And most FX and CFD brokers are self-funded. They
make some money, they keep it. They don’t need external investors until IPO,
but until really. When you have to compete on a much grander scale and you’re
going to need a much larger scale.”
“These firms have the advantages that when they’re not
profitable, they can easily raise money and large sums of money in bulk.
Because they do not have the earnings volatility of a B-book pure shop.”
Shifting Geographies and New Frontiers
The conversation also touched on emerging markets,
which Niv described as “where the action is shifting.” Once overlooked, he said
regions like Southeast Asia, Africa, and the Levant now boast real wealth and
rising trading participation.
“Who would have thought 15 years ago Africa would be a
hot market? Who would have thought, you know, outside of South Africa, which
always was. But the other countries were definitely not.”
“Who would have thought that sort of the non-GCC
Middle East would be a hot market. Jordan, all these places. ATFX is the second
largest office, if I’m not mistaken. So that 15 years ago, you’d call me crazy.
It never would have happened.”
“Today, it’s a real place with real income, with real,
you know, wealth.”
Niv predicted that global financial “supermarkets”
would eventually buy their way into these growth regions. “It’s not happening
tomorrow, but sooner than most people think,” he warned. “Look at Kraken
acquiring NinjaTrader — if that weren’t an American firm, its first target
would’ve been one of the top 10 FX brokers.”
Industry Reflections: Convergence and Focus
Reflecting on the broader discussions at the summit,
Niv said the line between institutional and retail trading remains less blurred
than some suggest — though convergence is clearly accelerating. What he values
most, he added, is perspective.
“I was not of the opinion, given my experience, that
the retail industry and institutional business is converging. I think other
people’s experience is definitely different. But I think that’s something that
that would be a cool debate.”
But I think that’s something that is a very, is a very
big deal. When asked whether he expected to win his upcoming debate on whether
prop trading is good for the industry, Niv laughed: “I rigged it — I picked the
favorable side. It’s a biased room.”
“(Prop trading) value proposition to the client is
such that this has attracted a large number of users who never considered FX
and CFD trading before” Drew Niv, Chief Strategy Officer at ATFX Connect,
shared the comment when asked whether prop trading is good for the industry.
Speaking to Jonathan Fine, Content Strategist at Ultimate
Fintech, Niv, a long-time industry expert, defended proprietary trading as a
force for market expansion, even as he warned brokers to brace for a looming
wave of competition from neobanks and fintech giants.
He admitted that prop trading remains “mathematically
unsound” in many of its current incarnations, yet argued it has become a
crucial gateway for new entrants into the online trading world.
ATFX is a global online forex and CFD broker that
offers trading in currencies, indices, commodities, shares, and
cryptocurrencies via the MetaTrader 4/5 platforms and its institutional ATFX
Connect offering. The broker operates under the “ATFX”
co-brand across multiple regulated entities, including AT Global Markets (UK)
Ltd.
Niv acknowledged the model’s flaws — high churn rates,
inconsistent performance metrics, and patchy risk controls — but sees gradual
maturation. Early prop challenges, he explained, were driven “99.99% by luck,”
yet are now evolving toward more realistic trading conditions and skill-based
evaluation.
“But the problem was that initially the qualifying
rules of you won and you qualify for a quote unquote real account. Those rules
were too loose. And people essentially won by a lot. They’re still too loose,
but they’re getting tighter. The leverage restrictions are getting more.”
He likened today’s prop trading phase to the “wild
west” period preceding the rise of regulated retail FX two decades ago. The end
result, he suggested, will again be positive: “Just as retail FX expanded the
market 25 years ago, prop trading will bring in a fresh generation of traders.”
Drew Niv (left) during an interview with Jonathan Fine
Neobanks and the Threat of Scale
Niv struck a more cautionary tone when the
conversation shifted to neobanks like Revolut and Monzo entering the trading
arena. Drawing on FXCM’s experience in Japan — where internet
conglomerates like Rakuten and GMO wiped out hundreds of brokers — he warned
that the same dynamic could now play out in Europe.
“And what happened around those years is that the
large, essentially the Rakuten, which is like the Amazon of Japan, GMO. So you
look at all these Internet giants who had an endless amount of inventory from
online advertising, all of the stuff that they do. And a user base.”
“And therefore, they had a user base and a massive
brand. And their cost of acquisition was tiny. And they had to essentially say,
oh, if you open an account with us, you know, like Rakuten is a good example.”
Niv argued that brokers face a choice: specialize
regionally, expand into multi-asset offerings, or risk being outspent.
“And most FX and CFD brokers are self-funded. They
make some money, they keep it. They don’t need external investors until IPO,
but until really. When you have to compete on a much grander scale and you’re
going to need a much larger scale.”
“These firms have the advantages that when they’re not
profitable, they can easily raise money and large sums of money in bulk.
Because they do not have the earnings volatility of a B-book pure shop.”
Shifting Geographies and New Frontiers
The conversation also touched on emerging markets,
which Niv described as “where the action is shifting.” Once overlooked, he said
regions like Southeast Asia, Africa, and the Levant now boast real wealth and
rising trading participation.
“Who would have thought 15 years ago Africa would be a
hot market? Who would have thought, you know, outside of South Africa, which
always was. But the other countries were definitely not.”
“Who would have thought that sort of the non-GCC
Middle East would be a hot market. Jordan, all these places. ATFX is the second
largest office, if I’m not mistaken. So that 15 years ago, you’d call me crazy.
It never would have happened.”
“Today, it’s a real place with real income, with real,
you know, wealth.”
Niv predicted that global financial “supermarkets”
would eventually buy their way into these growth regions. “It’s not happening
tomorrow, but sooner than most people think,” he warned. “Look at Kraken
acquiring NinjaTrader — if that weren’t an American firm, its first target
would’ve been one of the top 10 FX brokers.”
Industry Reflections: Convergence and Focus
Reflecting on the broader discussions at the summit,
Niv said the line between institutional and retail trading remains less blurred
than some suggest — though convergence is clearly accelerating. What he values
most, he added, is perspective.
“I was not of the opinion, given my experience, that
the retail industry and institutional business is converging. I think other
people’s experience is definitely different. But I think that’s something that
that would be a cool debate.”
But I think that’s something that is a very, is a very
big deal. When asked whether he expected to win his upcoming debate on whether
prop trading is good for the industry, Niv laughed: “I rigged it — I picked the
favorable side. It’s a biased room.”
