The Chicago Mercantile Exchange (CME) is trying to attract the spot foreign exchange traders by instituting a retail partner program with nine futures commission merchants (FCMs) in the U.S. and three in Europe (UK, Spain, and Denmark).
The goal is to attract new traders, such as active stock traders and cash forex traders, into the futures marketplace, as well as “extend the life” of existing traders, according to Mark Omens, associate director of equity products at the CME.
This year the CME is promoting EMini futures and options and forex futures and options. They’ve conducted 50 live and online seminars this year, and they held 23 live workshops and 148 online seminars last year. They also started a CME seminar of the month program which highlights upcoming product launches, such as exchange-traded fund futures (ETFs), as well as topics relevant to the targeted audience. The partner firms promote the seminars as well.
“Our definition of an active trader is a committed, sophisticated, online trader — and an individual whose sole income is not just trading, necessarily,” Omens says.
“When you look at retail, it could be a [person] who trades one to three times a month, or every day, all day long. We want to provide a sound understanding of futures trading for everyone and want to help them become better traders.”
The average retail account lasts just 12 to 15 months, and most new traders don’t make it past six months, Omens says. He feels there is a big difference between trading in the spot markets and trading futures.
“We need to educate them,” he says.
“Some [new traders] just start trading really recklessly.”
Omens says the CME’s “Webinars” are designed to instill the money-management knowledge that makes their primary business successful — say, a dentist, a small-business owner, an analyst, or a retiree.
“A brokerage will not give you rules,” Omens says, which is why the exchange wants to work with brokerages to educate traders and extend the life of existing traders. The CME does not give trade recommendations, but orchestrates seminars on its products, the users, and discusses leverage.
Dan Gramza, the primary CME educator, focuses mainly on technical indicators. The courses do not offer buying or selling tips.
The CME sends its live Webcasts to all of its customers and the brokerage firms it has partnered with, and archives them as well. Firms that are not current partners can access the seminars also.
Eight U.S. brokerages are partners in the program, and there are three outside of the U.S. in London, Spain, and Denmark.
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