How to work with micro lot traders

Author: Ivan Egorov

The trading climate is somewhat strange these days. On one hand, more people than ever are interested in trading. On the other hand, the global economic slowdown is reducing the disposable income that many households are left with, and the rest are more cautious about losing their hard-earned money.

Not surprisingly, this leads to some brokers reporting a drop in active traders. However, not everyone is experiencing this, and, as reported by Finance Magnates, the UAE’s situation is drastically different. The region has seen a 9% increase in FX and CFD traders, with over 18K new traders joining the market

So what is the secret here?

New UAE traders are primarily attracted by an opportunity to trade micro lot volumes that keep the risks low and gives them the time to learn and improve their skills before (possibly) moving on to larger volume trading.

For many brokerages, catering to traders with smaller volumes would be an excellent way to ensure their number of traders remains high, and, with time, a portion of those traders will move to larger volume trading, securing the high overall volumes.

But how does one achieve that?

At TFB, we’ve talked a lot about tips and tricks that keep traders happy and loyal, such as powerful bridging that ensures the best pricing and high speed of operations, unique offerings, such as synthetic instruments, and educational content that positions the broker as an expert and helps traders operate better.

One of the options that TFB clients have to attract and retain traders is using the Volume Converter functionality within the Trade Processor liquidity bridge. The technology does exactly what it says in the tip – it converts volumes of atypical contract sizes to ensure they are processed correctly without disturbing the trading process.

Most LPs do not support mini and micro lot sizes, so how can brokers hedge their risks?

The Volume Converter in Trade Processor solves the issues of hedging the mini and micro instruments. It enables brokers to process all contract sizes, no matter how atypical, without any extra complication.

Contact us to learn more about this functionality