New TradeStation Forex Subsidiary Announced
With the launch of [its] new TradeStation Forex business, TradeStation will have transformed its forex offering from a fully disclosed operation, where it introduces customers to a third-party forex dealer, to one where its new subsidiary, TradeStation Forex, Inc., an approved Retail Foreign Exchange Dealer (RFED) and member of the NFA, acts as principal and directs aggregated pricing to its customers.
The third-party forex dealer referred to in the announcement is currently GAIN Capital, and TradeStation will shortly be cutting out that middleman and dealing directly with a number of liquidity providers. Retail forex traders will be able to use the recently introduced TradeStation 9.0 platform to access that liquidity, and the announcement also stated that:
Our forex customers will now be able to trade forex with no platform access or forex data fees, no lot restrictions, 50:1 leverage for the popular currency pairs, and tighter spreads that include a reasonable mark-up.
so there will be no commissions to pay either. Of course it remains to be seen just how tight those spreads prove to be.
The same press release also announced that TradeStation had been invited to ring the NASDAQ opening bell last week. In his speech at that ceremony TradeStation Group's Chairman and CEO Salomon Sredni said that:
Within the next few weeks we're scheduled to release a major important restructuring of our forex business.
We think our new forex offering will be the best choice available to the forex retail market.
It also remains to be seen how long a period of time "a few weeks" turns out to be, and whether retail forex traders ultimately agree with TradeStation's own assessment. However the TradeStation platform has been providing traders with access to exchange traded stock, futures and options markets for 20 years now, so they do have considerable experience in such matters. Whilst the new version does show its age in some ways, TradeStation have managed to add object-oriented features to their EasyLanguage automated trading system development language, whilst maintaining backwards compatibility with a huge existing codebase far better than MetaQuotes have managed to achieve with their new MetaTrader 5 platform. Whilst MT5 is also supposed to be able to provide retail traders with access to other asset classes apart from forex, the platform is currently still undergoing apparently interminable beta testing so it's rather difficult to assess how this particular object-oriented war might pan out. It certainly looks as though TradeStation 9.0 will have a big head start, but it does have one significant disadvantage. Only one broker currently provides the TS9 platform, and that is TradeStation Securities Inc. I assume that as and when MT5 eventually emerges from testing it will be offered by rather more than just one or two brokers.