The launch will enable clients of Saxo Capital Markets to both consolidate their existing portfolios by allowing them to trade multiple asset classes from a single account, and to take advantage of Saxo’s cross-product margining. There will be no minimum ticket fee or carrying cost. Clients will be able to exercise options online.

The launch reflects the growing appetite for stock options among both institutional and retail investors as indicated by the 6.4% rise in the number of derivatives traded on-exchange (ETDs) in 2013. In particular, recent market volatility has provided attractive investment opportunities for options traders, and investors are becoming more aware of how they can hedge their exposure in asset classes such as equities or as a means of locking-in existing gains.

Alan Plaugmann, Head of Platforms & Products at Saxo Bank, the parent company of Saxo Capital Markets, commented: “We consistently strive to provide a platform that is streamlined, efficient and provides the tools and functionality to give our clients a competitive edge in the multi-asset arena. The addition of equity options to our platform marks an important step in this ongoing development of the Saxo proposition, particularly at a time when appetite for this particular instrument is on the rise.

“As investors are seeking more diversity in asset classes, instruments and financial services, we have built a flexible solution which caters both to the retail and institutional market segments, enabling our clients to trade equity options in a way that best enhances their individual investment strategies.”

Saxo Capital Markets will initially provide direct access to the 200 most liquid stock options across the US, Europe and Asia Pacific. These will comprise the top 50 US stock options and ETF options; the top 100 European stock options; the top 20 Hong Kong stock options; and the top 30 Australian stock options. Over the course of the year, and expand its offering to include 350 stock options in total.

Saxo Capital Markets’ parent company also said that it signed a content sharing agreement with The Options Industry Council (OIC) making OIC’s renowned equity options educational materials available via Saxo Bank Group globally.

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Outlook for Europe

Saxo Bank, the online multi-asset trading and investment specialist and parent company of Saxo Capital Markets, has published its second quarterly insight for 2014, focusing on the outlook for Europe.

European outlook: A United States of Europe?

Following an abundance of false starts, the European economy is likely to encounter further challenges in Q2, Saxo Bank writes in its second quarterly insight for 2014. By the end of the second quarter, the European Central Bank is likely to grow increasingly concerned about deflation and the lack of growth and signal new quantitative easing and yet another set of unconventional measures.

As well, Europe faces its biggest electoral challenge since the 1970s, as the reality gap between Europe’s voters and their EU-friendly politicians is wider than ever. At the May EU parliamentary elections, look for EU sceptic parties to form one of the largest overall blocs in the new European Parliament. If Brussels listens to voters, it could mark a decisive turning point for the failing EU experiment, even if for now, the political status quo is more likely to maintain the upper hand.

While the economic outlook appears to be improving for Spain, Portugal and Greece, this is really part of an internal transfer of problems from these ‘Club Med’ countries to France and soon Germany, which is likely to flirt with recession by the end of the year. France and Germany are also likely to suffer from reduced exports, particularly in the luxury goods sector, as Asian growth cools.

Steen Jakobsen, Chief Economist and CIO for Saxo Bank, commented: “The EU member countries have surprised with their political solidarity over the last few years of the EU crisis, but the electorate is growing restless and EU-sceptic parties are making huge inroads that the establishment must recognise. Beside this we have the eternal problem that the EU entirely lacks an economic foundation that is sound and long term. Here in early 2014, EU complacency has never been higher, just as real political and popular entropy is about to make its presence felt.”

Global outlook: a ‘state of flux’

The ‘Fragile Five” (South Africa, Brazil, India, Indonesia, Turkey), which with the recent additions of Argentina, Russia and Chile have become the “Fragile Eight”, are now in the process of rebalancing, as the Fed tapering has forced their currencies weaker and required policy tightening that will crimp growth and right the structural imbalances that have grown in recent years. This “state of flux” is a positive development overall, but too many countries and economies are trying to do the same thing simultaneously – devalue and increase exports – so growth is likely to weaken structurally and cyclically due to prior credit excesses.

As Jakobsen points outs, “We have been so focused on saving the world, the banks and the political system that we have underinvested in people, education, infrastructure, innovation and technology.

“It will not be the European Parliamentary elections that make or break the EU, but how the policymakers and their trusted mandarins respond to the slowdown and subsequent rebalancing of the world.”

Key points on investments for 2014:

Fixed income: core government bonds will be the only asset that is up Q1 2014 versus Q1 2015 (rebalancing and lack of productivity).

Foreign exchange: EURUSD will peak at about 1.4000/1.4050and then turn down to 1.2500 (the ECB should get active on deflation over the summer). USDJPY could see 95.00 on a VAT hike and initial signs of Abenomics failing. The “Fragile Eight” will drop another 5 percent.

Commodities: will do well through Q2 as real rates will drop, but could fall again heading into H1 2015.Will take profit in Q3 2014.

Equity: The S&P 500 will peak at about 1,900-1,950, then a 30 percent correction. Equities are the only asset not yet hurt by the changing economic cycle.

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The new portal enables traders around the world to share their trades with peers and transforms trading into a social experience.

“We want to set free the peer-to-peer power of traders around the globe by enabling them to connect online with experienced and like-minded investors who are tired of input from salespeople from traditional banks,” Saxo Bank co-founders and co-CEOs Kim Fournais and Lars Seier Christensen said in a joint statement.

On the new site, live now at beta.tradingfloor.com, investors can share their trades in a community where all performance data is verified so traders can be sure of the performance of the people they choose to follow or copy.

Kim Fournais and Lars Seier Christensen believe it may be a game changer: “Having once revolutionised online trading as a first mover in 1998, we now want to democratise the access to trading and fund management by opening up an otherwise closed world of trading. We now enable investors to share their trades openly, interact with each other, post comments and strategies, discuss, follow and copy each other. We believe that this may change radically how investors will go about trading FX, CFDs, options, futures, bonds and equities in the future, making trading a social experience,” they said.

Kim Fournais and Lars Seier Christensen added: “At the new TradingFloor.com, you can see what the best participating traders are doing with their own money in any asset class of your choice. We are deliberately only featuring real traders with real accounts trading their own money to ensure a social trading community of serious investors.”

The new TradingFloor.com also features a range of valuable content for traders, such as market news and views, data, insights and trade ideas from Saxo’s research teams and VIP authors. A real-time trade stream will reveal the current market sentiment. British award-winning ITV News correspondent Angus Walker has joined Saxo and will, along with former Bloomberg and BBC World anchor Owen Thomas, front the portal’s on-demand TV channel by reporting from Saxo’s own trading floor.

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Outlook is positive for Q4: Saxo Bank

With or without the support of further quantitative easing from the major central banks, global growth is headed for a slowdown, say analysts at Saxo Bank, the parent company of Saxo Capital Markets, in the Bank’s financial outlook for Q4.

They don’t expect a sustainable comeback for growth until policymakers stop supporting the parts of the economy that don’t need or deserve support and start supporting the most important engine of job and economic growth: small and medium-sized enterprises (SMEs).

With the intensifying need to reset interest rate expectations after the Fed’s non-tapering of its asset-buying programme, there is a perfect storm brewing on the economic horizon. This would be good news, Saxo Bank pointed out in the Quarterly Outlook published on 8 October. The only way to stop the unprecedented monetary experiment is for it to fail to show that it is generating what should always be the number one priority: more jobs and rising incomes.

Saxo Bank argues that a weak economy and in particular the struggling labour market will force the Fed’s hand, and instead of tapering it will have to increase its QE next year as the economy is too weak to weather a pullback in Fed support. As the markets adjust to the prospect of more QE rather than less, we may see another bout of hope that extend and pretend will continue to pump asset valuations ever higher. However, further ahead, likely sometime early in 2014, the QE cycle – or at least the markets response to it – will begin to falter as Fed policy will increasingly risk losing credibility. In the end, all major historic shifts in policy have only come as a result of massive stock market declines or unemployment rates becoming too high and painful to ignore. In other words, QE will only be threatened as a policy tool when the markets roundly reject it, rather than celebrating it.

Steen Jakobsen, Chief Economist, Saxo Bank, comments: “The global economy is running on empty. 2014 will see a bigger discussion on what is the real exit strategy from the current ‘extend and pretend’. Right now the market only sees two paths: Inflating the economy to reduce the burden of debt, or writing off the debt between treasuries and central banks. But I believe there is a third way: A repeat of the 1940s – the last time fed was this involved in so-called helping the market. Back then, the Fed got saved by disinflation and a recession brought on by the very same policy which today slows the path towards recovery too much easy money. History is about to repeat itself only because we fail to learn and to embrace the need for change”

Saxo Bank advises to prepare for a good start to Q4, but for headwinds in asset markets to build as we roll in to 2014. Steen Jakobsen added: “2014 will be the year to clean up and prepare for a world that is increasingly more balanced, less leveraged and more proactively helping the one part of the economy we have kept outside the loop throughout this cycle: the SME.”

The full report can be downloaded here: http://storage.saxosoft.net/au/q4-outlook.pdf

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Call for greater transparency in managing client money.

Saxo Capital Markets (Australia) Pty Ltd (Saxo) has called on all financial services firms managing client money to boost transparency, unveiling a market leading initiative that will see a review sent quarterly to all Saxo clients.

Saxo Capital Markets (Australia) Pty Ltd (Saxo) has called on all financial services firms managing client money to boost transparency, unveiling a market leading initiative that will see a review sent quarterly to all Saxo clients.

The review will provide a check between clients’ trading accounts and the segregated trust bank accounts to ensure the two balances can be reconciled and matched, providing total transparency of client money (TOCM).

The new initiative by the online trading and investment specialist aims to provide an extra layer of assurance to its clients of the presence of their funds.

Anthony Griffin, chief executive officer of Saxo Capital Markets (Australia) said investors were not always given a complete picture about the degree of protection of funds, directly affecting every investor.

“At Saxo, we are taking a proactive approach to client money by ensuring total transparency for anyone using our trading platform. We believe the level of oversight being provided should be industry practice for any entity that is an AFSL holder,” he said.

Saxo, a leader in technology, product diversity and access and now client money security, believes this initiative will allow its clients to invest with an additional level of comfort, knowing their funds can be reconciled to its financial statements and not being used for hedging or commercial operation purposes.

The move by Saxo is a more stringent adaptation of the ASIC Class Order (CO 02/294) from 2008 for businesses offering Investor Directed Portfolio Services (IDPS).

“Policies and procedures are not enough to demonstrate transparency, and we believe by going above and beyond what is required by Saxo from a regulatory perspective, we are demonstrating to the market that client money is not an afterthought for Saxo but core to our business as AFSL holders,” Mr Griffin said.

“By ensuring transparency and security, our clients can focus their energy on core activities of investing and trading. Despite this initiative adding an extra layer of compliance for our business, this is an area Saxo is proud to address proactively to benefit our clients,” he concluded.

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