Three years ago people were using two main ways to speculate or invest in the financial market for their own account. The first one is the classic one, which is based on communication with their banker. The second one is to use an internet platform like ebanking, where you can invest your money with low transaction costs.
The new coming smartphones start to revolutionise the way the market is traded. According to the Financial Times, an application on the Apple store named Merlin, which was created by the Credit Suisse has been downloaded about 225’000 times. With this application, clients from Credit Suisse can trade on the market almost everywhere and at any time they want. This new kind of smartphones applications could partly explain of the increase of daily trading volumes in the Foreign exchange. A report from the Bank for International Settlements shows that there is an augmentation of 20 per cent in daily trading volumes in the Foreign exchange; from $ 4’000bn a day in 2007 to $ 4’800bn a day in 2010.
Picture of Merlin's application
Source : itunes.apple.com
These two elements make me think that there is a little correlation between smartphones and the augmentation in daily volumes of trades in the market, even more knowing that at the present, a lot of banks develop their own trading application for smartphones.
My opinion on this new use of smartphones is that it is not positive for small bank clients. It’s really good for banks because they can have more trade on a daily basis, so they will have more incomes linked to the transaction costs. It is also different for the small clients because speculation is made easier. My view is that perhaps some clients will earn some big amount of money, but the majority of them will loose a lot, because day trading is for professionals.
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