The foreign exchange (FX) market now generates an impressive $5.3 trillion a day, making it the largest market (by volume) in the world. By combining our leading-edge technology and years of expertise in the FX industry, Boston Technologies can deliver the forex market directly to any entrepreneur interested in starting his or her own FX brokerage. If you're looking to become a Forex broker, our Start Your Own Brokerage (SYOB) package is available at a variety of price points and capabilities and includes everything you’ll need to take advantage of the opportunities available in the foreign exchange market.
2. BOSTON TECHNOLOGIES
• Boston Technologies is the inventor of the first commercial MT4
bridge and Start Your Own Brokerage (SYOB) package
• Established: April 2007
• Revenue growth year over year
• Developed Network Infrastructure with data centers in New York
NY4, London LD4, Tokyo TY3, and Hong Kong
• Platforms supported: MT4, FIX API, HotSpot, Integral, Currenex,
FXAll, FXone, First Derivatives, FlexTrade, 360T, and EBS Direct
• Headquartered in Boston with offices in New York, London,
Tokyo, and Shanghai
2
3. WHY START AN FX BROKERAGE?
Foreign Exchange Trading (Forex or FX) Generates
$5.3 trillion per day in Trading Volume
• No limit on growth ceiling
• 24 hour a day revenue opportunity
• FXCM & Gain Capital are publicly traded
• High margins, minimal startup capital and infrastructure – Fast to break even
3
$ 3.47
Billion
$191
Billion
$437.4
Billion
$5.3
Trillion
NYSE Equities Futures Forex
4. IB VS. SYOB
Introducing Broker Your Own Brokerage
Limitations:
• No Business Ownership
• No Control of Messaging
• Revenue Sharing
Revenue Generation Example:
• $500MM in Trading Volume/Month
• Example: Average 0.1 pip commission or rebate
• IB Revenue = $5,000
Advantages:
• Own Your Own Business
• Build Your Own Reputation
• Create Your Own Revenue Potential
Revenue Generation Example:
• $500MM in Trading Volume/Month
• Example: Average 2 pip mark-up
• Broker Revenue = $100,000
4
5. START YOUR OWN BROKERAGE VS. WHITE LABEL
Your Own Brokerage White Label
Own Your Own Business – Build your own
equity
An extension of an already established
brokerage
More Control – Customize your own
business
Little control with no ownership
Unlimited Sub White Labels – Receive a
share from unlimited white labels
Can not offer sub white labels
No Conflict of Interest – No ties to a specific
broker
Direct competition with the broker
Greater revenue Opportunity – Unlimited
growth
Broker shares in revenue
5
9. METATRADER 4 (MT4) TRADING PLATFORM
• MT4 released in 2005
• 2.5 Million FX Traders Use MT4 Everyday
• Leading Platform for Expert Advisors (EAs)
• Accessible and User-friendly Interface
• Comprehensive Trader Features and
Functionality
• Includes Graph; Pre-set Indicators; Mobile
• Stable Internet connection in poor conditions
9
10. AGENCY VS PRINCIPAL
Agency (STP) Model Principal(Market Maker)
Variable spreads that typically widen during news
Predominantly fixed spreads, sometimes even 4-digit
prices. Freezes during the news
No conflict of interest between Broker and Trader
Inherent conflict of interest between Broker and Trader
as Broker’s P&L is dependent on users’ profitability
No re-quotes, 99.7% execution ratio
Typically requotes, rejects for larger orders and
uncomfortable flow
Comfortably executing high frequency, algo (EA) trades Difficulty handling high frequency predatory Flow
Typically has issues with offsetting small trades(<2 st lots)
due to high processing costs
Typically has issues accepting larger size orders
Investment in infrastructure and middleware is required Less expensive infrastructure (only MT4 server required)
Consistent profitability makes company attractive to
potential investors
Monthly P&L swings can cause inconsistent and volatile
profitability picture
Model preferred by regulators, less capital intensive
Requires high capitalization in regulated environment,
more reporting
10
11. STP REVENUE POTENTIAL
Revenue forecasting assumption adding 10 new traders per month:
1. Avg. Deposit: $5,000*
2. Avg. Trade Volume Multiple
• Low: 500X (manual traders)
• High: 1,000X (algo traders)
3. Avg. Markup: 2 pips (1 pip per side)
$-
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
Month1
Month3
Month6
Month9
Month12
Month15
Month18
Month21
Month24
Month27
Month30
Month33
Month36 Revenue - Low
Revenue - High
*ForexMagnates
**Estimate based on forecasting example
Monthly revenue of
$180K to $360K
$4 million Annual
Business After 3 Years**
=
11
12. • Incorporation / Corporate Banking
• Legal Framework
• Custom Branded MT4 Trading Platform
• Hardware & Datacenter Hosting to run
the platform (NY4;LD4;TY3,HK)
• Robust and fully customizable
reporting & BackOffice accounting
• 24 Hour Real-time monitoring
• Risk management software
• White-Label Options
• Access to our experience and FX/MT4
expertise
• Personal Account Executive
• FX, Metals and CFD liquidity
BOSTON TECHNOLOGIES’ TURN KEY SOLUTION
12
13. • One Point of Contact: Boston Technologies
• Partnerships designed with mutual incentives
• Take advantage of BT’s experience with other customers
• Compete with same setup as any large brokerage ( FXCM, Gain..)
• Proven leader and innovator of FX technology
• Access to our best in class network of trusted partners
BT SYOB PACKAGE BENEFITS
13
15. TECHNOLOGY AND LIQUIDITY COSTS
15
Item DIY (Do It Yourself) cost Managed Provider
Hardware
3 dedicated machines
Buy top of the line hardware (live+demo+backup)+
delivery +setup: ~$9,000
Lease top of the line hardware:
(live+demo+backup)+ delivery +setup:
~$10,000 over 3 years
Hosting
6 Units
Colocation facility (+power + network):
Buy full rack (42-55 Units)
~$10,000-$15,000 per month
6 units (+power+network):
~$1,500-$2,000 per month
Plugins
PAMM Plugin
~2 months development + QA @$40 per hour
~67,000
$1,500 per month off-the-shelf
24 hour support 3 shifts, 1 full time person per shift @ $40,000/year
~$10,000 per month
$2,000-3,000 per month
Web Dev
(Trader Room)
1 person @30,000/year
~$2,500/month
$2,000 setup, $600 monthly
off-the-shelf
Aggregator 2 years, 3 full time developers @100,000/year
~$600,000
$10,000-$20,000 setup
$3-$7 per million
TOTALS One Time Fees $250,000-500,000
Monthly Fees $20,000-50,000
One Time Fee $25,000-78,000
Monthly Fees $2,000-3,000
17. SYOB DEPLOYMENT STEPS
Approximate 8 Week Process
1. Agreement Signed by Client
2. Compliance Documents Completed
3. BT Due Diligence Review
4. Incorporation
5. Brokerage Bank Account Application
6. Brokerage Bank Account Set Up
7.Complete MetaQuotes White Label Request
8. MetaQuotes White Label Processing
9. Platform Settings with Account Management
10. Configuration
11. UAT Deposit
12. UAT Acceptance
18. CONTACT US
• Phone: +1(617)-314-6800
• E-mail: sales@bostontechnologies.com
• www.bostontechnologies.com
Boston Technologies Inc.
280 Summer Street, 9th Floor
Boston, MA 02210
Phone：+1 617 314 6800
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Editor's Notes
Trading in foreign exchange markets averaged $5.3 trillion per day in April 2013. This is up from
$4.0 trillion in April 2010 and $3.3 trillion in April 2007. FX swaps were the most actively traded
instruments in April 2013, at $2.2 trillion per day, followed by spot trading at $2.0 trillion.
