Safeguarding clients with gap level protection, liquidation buffers

Multi-asset brokerage Exness reveals top market maker themes
Safeguarding clients with gap level protection, liquidation buffers
Market data

Exness, a global brokerage firm, concluded 2022 impressively, recording a monthly trading volume of $2.5 trillion in December. The positive momentum continued into 2023, with company’s monthly trading volumes surpassing $2.8 trillion. Last March, trading volumes soared to an impressive $3.8 trillion. Additionally, Exness experienced a significant surge in active clients, reaching nearly 375,000, as indicated by their financial data.

Damian Bunce, the Chief Customer Officer at Exness, told Economy Middle East that the exceptional performance can be attributed to a combination of factors. Bunce highlighted their effective distribution model, which enables them to enter new markets strategically, identify suitable partners, and successfully promote their products and services.

“We’re a company of 2,000 people and 800 of those are working in technology and data science, allowing us to avail very big volumes and build excellent products that are highly price competitive,” he said.

Bunce emphasized that once clients engage in trading with Exness products, the company ensures these traders have the assurance that in the event of any incidents or issues arising, these are promptly addressed and resolved. “So, when you combine distribution, product and service, you have a compelling proposition with Exness,” Bunce said. 

CFDs: Leveraging and risks

CFDs, also known as contracts for differences, are financial instruments that allow clients to adopt either a long or short position, i.e. profit from both upward and downward market movements.

One of the key advantages of CFDs is that they provide traders with leverage, granting them the ability to borrow funds from brokers to engage in more substantial contracts, such as those involving gold and oil.

“CFDs have become popular because of the functionality they offer in a big industry that has roughly 1 trillion in traded volume per day for retail alone. But education around leverage is really crucial,” Bunce cautioned.

Leverage does have the benefit of providing upside opportunities. “For less money, you can buy something pricier. But the downside of course is that you can lose your money quickly, including all your deposits. So, it’s important to be measured about not overleveraging.” Bunce said.

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Exness products garnering mass appeal

Bunce elaborated on one of Exness’ popular products, which addresses a common industry paint point known as “Slippage.” This occurs when a client specifies a trade price that is ultimately not fulfilled due to market movements, also referred to as “gapping.” Bunce clarified that the responsibility for slippage lies not with the broker but rather with the market itself.

To alleviate this concern, Exness provides a feature called “gap level protection,” which has garnered significant appeal among customers, especially in volatile markets.

In certain instances, brokers may choose to widen spreads, as this is usually a risk management measure to protect the broker and historically it has the negative side effect of liquidating some clients’ leveraged positions.

“At Exness this can never happen. Clients’ positions are never liquidated as a result of spread widening – this was a very deliberate measure introduced as part of Exness’ unique advantages and is referred to as volatility protection. With clients that trade with leverage, they can get upside and never lose more than their initial deposit and so, there’s never a situation where a trading customer of Exness could effectively “owe” Exness money as a consequence of us liquidating a leveraged position which would have made the client balances negative. That negative is always Exness liability,” Bunce said.

He explained that situations do arise when clients actually have their orders remain open and live, even though they go below zero. “We provide that added buffer that keeps our clients alive for longer. This functionality allows people who thought they got liquidated to actually recover and make money when markets rebound in their favor,” he said. 

Damian Bunce, Chief Customer Officer at Exness

Exness plans for the region

Exness invests heavily in having a robust presence in many regional conferences. “We usually have the largest stand. We do that because people want to see their counterparts, and want to know we are real, big and well capitalized,” Bunce said.

In terms of regulatory matters, Exness acquired a brokerage company in Jordan, obtaining its first license in the country. Recognizing the immense opportunities available in the area, Bunce emphasized that Exness is actively engaged in ongoing discussions with local regulators to determine the most suitable operational structure for the region.

Upcoming market themes

According to Bunce, today presents a remarkable opportunity for trading, with numerous possibilities available, although he cautioned that some opportunities come with inherent risks. One significant concern he highlighted is the unresolved issue of the debt ceiling within the US Congress. If this matter is not resolved in a timely manner, it could have catastrophic consequences for the market, particularly regarding defaults on US debt.

Bunce added that any financial instrument linked to the dollar would likely be impacted if such a scenario were to unfold. He provided an example from the past 6 to 12 months involving the Japanese yen. As the U.S. Federal Reserve raised interest rates to combat inflation while the Bank of Japan maintained stability, the yen weakened against the dollar. This, in turn, created extensive trading opportunities.

Bunce explained that the narrative surrounding the strengthening of the dollar is expected to remain a significant theme in the future. He also pointed to the issue of de-dollarization some countries are resorting to but said that this scenario playing out over the next 12 months was highly unlikely.

According to Bunce, the potential shift of Saudi Arabia considering accepting oil payments in yuan, in addition to or instead of the dollar, represents a significant market-making move.

“And then there are themes around cryptocurrencies. We’ve seen the Bitcoin Summer, and Winter, and now maybe we’re in Spring. Bitcoin provides many traders with relatively interesting alternatives to traditional assets. With daily trading at roughly $68 billion, Bitcoin is a pretty relevant asset today.”

Bunce also noted gold as being another market theme. “Exness is a very big gold trader. It’s an asset with a lot of intraday volatility and, in some ways, relates to all the major assets. So, when equities are booming, there’s an impact on gold and the same goes with inflation and interest rate moves,” he said.

Those interested in trading on Exness can visit the company’s official corporate website, Once there, clients can sign up, provide their credentials, and proceed to download either Exness’ proprietary platform or third-party platforms to begin trading. “But we’re not yet operating in all jurisdictions of the world. We have some restrictions,” Bunce said.

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