Advantage Futures

Our Explosive Growth of Futures Trading from Dubai

Q&A with Nirmal Patel and Ambaj Sharma, SVPs of Technology at Advantage Futures

October 2012

Q: There seems to be a significant increase in Advantage Futures business coming out of Dubai. Any thoughts on reasons behind this?

A: here are significant regulations in Dubai that provide a tax favorable environment for traders to conduct business there. More recently, with consolidation in the industry, we have seen a large increase in the number of traders looking for alternative futures brokerage firms. In conversations with these traders, we learned that most were using virtualized servers rather than dedicated hardware. We quickly realized that they could improve their trading through colocation and server hosting.

In addition, we worked with existing clients to help them sell their decommissioned servers to these new Dubai traders in an effort to reduce upfront hardware costs for colocation. As these traders learn the benefits of colocation and dedicated hardware, we have seen a dramatic increase in interest for server hosting and colocation from the Dubai region. 

Q: What types of products are traders in Dubai trading? Are they exchange specific or category specific?

A: Our clients in Dubai appear to favor tangible products such as metals and crude oil. Most trade CME Group products and, as they learn about other exchanges that offer like products, are expanding the number of exchanges they utilize. We have been introducing them to similar products available through NYSE Liffe US and ICE. TheDubai Gold and Commodities Exchange (DGCX) and the Dubai Mercantile Exchange (DME) are also popular as they offer products within the categories these traders are most familiar.

Q: What connectivity solutions are Dubai traders leveraging?

A: A high percentage of our client base in Dubai connect to Advantage’s infrastructure using a Virtual Private Network (VPN) connection and use Remote Desktop Protocol (RDP) to command and control their servers. They primarily manage algos via the internet and make changes to their parameters as necessary. They have largely colocated at the Equinix and Telx facilities at 350 E. Cermak in Chicago, although many are also considering colocation options at the new CME Group Aurora Data Center. Many of the traders spreading products between the CME Group and DGCX are evaluating the cost/benefit of colocating with the CME Group versus 350 E. Cermak.

Q: What sets Advantage Futures apart from other futures brokers in meeting the needs of Dubai traders?

A: The number one advantage many Dubai-based traders experience with Advantage Futures is our ability to communicate with them in their native language. They are comfortable with the fact that we have six employees who can speak Hindi or Gujarati, which are some common languages spoken in India. In addition, our responsiveness to their needs is something they have not found with other futures brokers. Many have commented that other clearing firms shuffle their inquiries through a London office or a Frankfurt office and don’t address their needs directly. At Advantage, we have a number of employees who can answer their questions in Hindi, Gujarati or English without having to pass them along to different departments.

Q: Do you expect growth out of Dubai to continue?

A: Yes. With the transition from floor to screen, we’re seeing more traders on a global level. Traders out of Dubai, specifically, are now realizing the benefits of colocation and server hosting, thus, enjoying the benefits of a more level playing field. They are spreading the word. Currently, they primarily trade commodities and products that they know. They are starting to learn there is more—it’s only a matter of time until they expand what they are trading.

Q: What kind of support does Advantage Futures offer traders in Dubai?

A: Advantage offers 24-hour support to clients. At any time, we can remote into their PCs and help solve any issue that may arise. We are also able to log into their server and make changes quickly. We find that many new Advantage clients appreciate this high level of service. Advantage clients benefit from one phone number and often find several people to help solve their issue. This extends to all clients, but many of the Dubai-based clients prefer the ability to converse with several Advantage employees in their native language.

Q: What is Advantage Futures doing to help further educate Dubai futures traders?

A: We’re starting to introduce these clients to additional exchanges and products. We will be in Dubai in November hosting a seminar to help further educate traders on the benefits of various technology solutions including hardware, colocation and software options. We want to expand our presence in Dubai, and look forward to introducing them to new ways of trading. They can evolve their trading to include new technology solutions as well as new exchanges and products. The more we introduce traders in Dubai to opportunities to which they may not be aware, the more growth we will see come out of that region.

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