A new player in the virtual trading market, Global Trader 247, is set to become the first online spread trading application in South Africa when it goes live in early 2001.
The company recently used 750 of the country`s top traders to test drive their system, available for download from www.gt247.com, by challenging them to make money in the Global Trader Challenge, which was won at the weekend by Wayne Muller, alias Wainage, who made R3 million in six weeks.
Entrants were given imaginary startup capital of R250, 000. Muller wins an Alfa Romeo 156 and R12, 000 in petrol vouchers.
The Global Trader system enables users to directly trade a selection of both global and domestic products in five main asset classes: Stock Indices, Bonds, Commodities, Equities and Currencies.
Trading is conducted with real-time immediacy, without commission or tax, and without the normal risks associated with share dealing. This is because users will be able to trade Contracts-for-Differences (CFD) via a dynamic, automated database system. Whilst business is encouraged over the website, the service will also be available over the phone.
CEO Fleur Gremmen said that when a user trades a CFD, the purchaser is exposed to the change in value of an asset rather than the total purchase cost. The CFD reduced the capital investment to users, and at the same time increased their potential for profits.
The unique system, which Gremmen says is the first time this form of technology and real-time functionality has been offered to market in South Africa, is based upon a CFD being drawn up between GT247 and the client to substitute the purchase of an equity, rather than the client using a broker to purchase the physical asset from the exchanges.
"This type of financial product has only been used between large institutions, mostly including banks, as well as large retailers in the United Kingdom," said Gremmen, a former member of JP Morgan.
Gremmen said that two factors separated it from other web sites, making it the ultimate alternative share-trading product.
The first was the contracts-for -difference and the efficiency gains it brings the user such as leverage, no commission or fees charged and no tax. The second was it`s powerful, fully automated backend system, which was designed and developed by Dockside Internet.
"The beauty about the system is that no paperwork is needed. Unlike other web sites where you still need to place a manual order, such as Tradek and U-Trade, Global Trader is 100 percent automated. It caters for a large customer base to interactively respond to prices in real time and immediately execute orders." Furthermore, GT247 offers a comprehensive website service featuring free live prices, charting facilities and other information services.
The Global Trader Challenge is part of a strategy to promote the product, while giving its target audience a chance to test-drive it.
After 6 weeks, the top performer won an Alfa Romeo 156 (worth R156, 000) and R12, 000 in petrol vouchers.
Charles Savage, sales & marketing director of Dockside Internet, said the product was not just cutting edge, but referred to it as "bleeding edge".
"The wide scale distribution of application services across the internet is right in line with current technology trends. This coupled with the delivery from a single infrastructure encompassing the integration of a myriad of cutting edge technologies and disparate service providers is what makes the development a market leader."
What made the project exciting, he said, was the opportunity to develop a first-to-market scalable transaction platform that integrated a range of technologies across a secure network infrastructure.
Ultimately, the real-time trading capabilities were delivered to the user via a browser-based java application. This required a developer skill set that covered everything from HTML to Java and a network knowledge base that covered everything from TCP/IP to Secure Sockets Layering.
There had been numerous challenges, from bandwidth issues to browser compatibility, Savage said.
The Java trading console, its interface and its web integration were developed by software development house The Lateral Alternative.
MD Craig Mason-Jones said, "GT247`s trading console is an order of magnitude more interesting than other online trading offerings: it`s fast; it`s scaleable; it`s secure; it`s exceptionally useable. From the first consultation we`ve focused on giving the user the most innovative trading platform. We imagined what the user should experience, and created the technologies to achieve it.
"The web should not only be about impressing people with fancy graphics, but about enabling them to work and play in ways that haven`t been possible before. GT247 pushes the boundaries of what is being done on the web, and demonstrates again that South Africa has technological vision and expertise that can set the pace, rather than follow in the footsteps of the rest of the world."
Response from brokers and investment bankers has been enthusiastic. An investment banker said that he had used it extensively for about 2 weeks and thought it was an exciting prospect.
"Their competitive advantage right now is that they are first to market in SA," he said.
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