To say that a good idea attracts imitators is to reveal (in the words of former RJR CEO F. Ross Johnson) a blinding glimpse of the obvious. And so from the first spread-betters like IG Index, arbing the UK tax code, we now have hundreds of imitators, each offering global market access, tight spreads, sexy-GUIs (shame on you for thinking that's in any way perverted!), and up to 1000-to-1 leverage (now THAT'S perverted!).
However, it is not the imitators but the wackiness and direction that things are moving. Take for example "Banc de Binary", who annoyingly has been monopolizing the banner ad space across my browser (thanks Google!). They call themselves (in the spirit of uber-bullshit) "Private Option Bankers", but it's merely an on-line bucket-shop specializing in rainman-like options. There is no mention of THEIR internalization, risk-management or hedging or their capital ANYWHERE, though, from their glossies, there appears to be lots of croupiers , ooops I mean "experts" ready to help you place your bets errr ummm I mean trades. Call me old school, but in my book it is almost always better to be a seller of insurance than a buyer, and better to be the house than the punter excepting when one is exposed to mandated or life-threatening unhedgable risks that one can ONLY mitigate via insurance. Our friendly "PRivate Option Bankers" however, have managed to combine BOTH aspects into one business. It is, of course, highly predatory, and I will wager this "banc" will NOT be a household name in 10 years next to Ameritrade or Schwab.
Predation raises the good question of who or what is their market. It's likely the same as another big-spender with their annoying Flash ads occupying yet more of my banner ad-space (cycling with the binary bank) on my browser - one called Inter-Trader.Com What exacty is is Inter-Trader.com? Have a look. Is it just another on-line bucket-shop? Is it about investing? Is it about trading? Is it about gambling? Is it a about partying? It seems to be all of these things! Just read the "About" section:
InterTrader Limited is part of the bwin.party family.
bwin.party was formed from the merger of bwin Interactive Entertainment AG and PartyGaming Plc in April 2011 to create the world’s largest listed online gaming company.
For further information go to www.bwinparty.com
So, there you have it: the prescient and growing on-line financial buccaneer encompasses investment, trading, gambling, entertainment, gaming and partying online all rolled into one - though not necessarily in that order. To reorder them in terms of likely target customer profile it might be: Gambling, gaming, entertainment, trading, partying, and that's it. Sadly, FWIW, we don't see the word Investment too much in their website.
All this begs the question: how will banks and securities firms respond to customers' seeming demands for entertainment and hedonism while investing? There is nothing worse than than the slow and painful torture of watching one's customers drift away without effective response. Bear Stearns (and others) have tried hiring entertainers (at least that's what they called former Fed Governor Wayne Angell when he was their lead currency strategist). I leave that one open for you to provide the requisite "strategic advice"...