A note on Bitcoin and the scope of our trading

This week we moved our company’s Saxobank trading account to a Money Manager Account.

Our company obtained approval under our Australian Financial Services Licence last year to trade on behalf of wholesale customers (as defined under Australian regulations).  This approval covers derivatives and FX contracts.

This allows us to offer a service where we manage capital for clients that can open a Saxobank account.  We intend to offer this service soon.  The process will be that when we trade, we will use Saxobank tools to automatically allocate that trade across our company’s account and client accounts.

I will provide more details on this process to prospective clients in due course.

The COINXBE ETN product that we were trading is listed on a Stockholm stock exchange and is classified as an equity security.  It does not fall under the class of products that our company has regulatory approval to trade on behalf of customers.

As such,  we have decided to no longer trade this product, such that if and when we have capital management clients, our trading performance will be exactly replicated across all accounts that we may manage.

Saxobank’s platform currently does not offer access to Bitcoin futures.  If and when they do, I would then consider trading bitcoin again on behalf of our company and clients.

While there is much debate over what category of asset Bitcoin falls under,  it should have the attributes of a store of value with transaction capability, so it is more currency than anything else.  As an FX analyst,  I see it as almost essential to be involved in cryptocurrencies.  I believe sooner or later most of us will be asked to cover this emerging asset class.

The price action in Bitcoin into the end of the week is again positive, in my view, and I remain positive on its outlook.

Our company will continue to concentrate on trading in currency markets, with an additional but secondary interest in trading government bond and interest rate futures.  We will not be trading commodities, except for gold, which is essentially also a currency.

We have not traded in equity index futures.  But they may be a valid way to express a macroeconomic strategy view. As such, we will consider such trades as part of our secondary interest along with rates and bonds.  However, we would need a reason to express a view in equity index futures over FX, rates or bonds.

Disclosure and Certification

  • The author of this report often has positions in the currencies and securities referenced in the report at the time of publication, or plans to trade in these currencies and securities.
  • The views expressed in this report accurately reflect the author’s personal opinion about the referenced currencies and securities referenced and other subject matter.
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Greg Gibbs,
Founder, Analyst and PM
Amplifying Global FX Capital Pty Ltd