Investors take advantage of opportunities in FX markets

As equity markets have traded broadly sideways for some weeks now, clear trends in currencies markets have helped Foreign Exchange become increasingly accepted as a mainstream asset class. Interest amongst UK based investors is expected to remain high as sterling's recent rally has driven strong trading activity over recent weeks and as it continues to gain against the US dollar and the Euro in particular. In a recent poll of Barclays Stockbrokers clients almost two thirds (59%) of investors believe the pound will strengthen against the US dollar and Euro throughout the remainder of 2009.

Barclays Stockbrokers launched its FX platform one year ago (BARXdirect: FX formerly FX on BARX) and has seen a growing interest from clients looking to trade in this area. BARXdirect: FX from Barclays Stockbrokers offers leveraged spot trading for the world's most liquid currency pairs and is designed to empower private investors with pricing, tools and service capability to enable them to participate effectively in the FX markets.

As investors' confidence has grown, Barclays Stockbrokers has seen trading increase by over 95% since January 2009 and as volatility has reduced in recent months and investors' confidence has grown, they have taken on larger positions and average trade sizes have increased by approximately 58%. The main currency pairs traded by Barclays Stockbrokers clients in recent months have been (in order of volume) GBP/USD, EUR/USD, EUR/GBP, GBP/JPY and EUR/JPY.

Barbara-Ann King, Head of Investments at Barclays Stockbrokers, comments: "As sterling has strengthened over recent weeks we have seen strong trading activity on our FX platform. Barclays Wealth research so far this year has suggested that sterling should strengthen and this has largely played out. We appear to be at a crucial stage of the sterling trend, with the recent weakness either providing a good buying opportunity before sterling resumes its upward trend, or perhaps signaling a change in sentiment and therefore trend with investors turning their backs on the currency."

In response to a growing demand for this product, Barclays Stockbrokers has introduced enhancements to its platform, to enable clients to trade more efficiently. For example, it has introduced SlipFiX, its new slippage control functionality which allows clients to control possible slippage that might occur between them deciding to ‘click' and their order being executed. In volatile markets, traders find price slippage hugely frustrating, and it can be quite expensive, and so SlipFiX was designed to improve the client experience by minimising occurrences of negative price slippage.

It has also introduced the Trailing Stop Order, this gives clients the ability to enter an order with a moving, or trailing, activation price. Trailing stop sell orders can be used to maximise and protect profit as a price rises and limit losses when it falls. Conversely, trailing stop buy orders are used to maximise profit when a price is falling and limit losses when it rises.

Barbara-Ann King, continues: "Since we launched our FX platform we have seen our clients increasingly using this asset class to generate returns as retail investors continue to seek out more complex, leveraged trading products to help them meet their investment goals. The recent string trends and the uncorrelated nature of foreign exchange as an asset class, means that it is appealing to a growing universe of clients. The recent enhancements to the FX platform have also been a key driver of new business. Since inception, we have continually refined our proposition with the help and feedback of our clients, it really is a platform designed by traders for traders."

Following changes to Barclays Stockbrokers trading platform the FX platform has been renamed BARXdirect: FX (it was formerly known as ‘FX on BARX'), this now brings margin foreign exchange into the BARXdirect suite of products offered by Barclays Stockbrokers to the more active trader.