Spread trading firm opens in Dublin

6 Nov 2002

Global Trader, a South African financial online spread-trading firm established by Dubliner David Butler is to locate its European hub in Dublin.

Trinity graduate Butler’s firm is profiting from an unprecedented rise in spread trading where punters go online and invest in the performance of a share, a currency or a commodity without actually owning the shares themselves.

The company was formed two and a half years ago in South Africa by Butler and his colleagues in the investment banking industry there. The Global Trader website has grown 60pc quarter-on-quarter, and according to Butler, is showing no signs of slowing down.

Globally, the company employs 22 people and Butler has returned to Ireland to spearhead the development of its European hub in Dublin, which will employ 12 people initially.

After graduating from Trinity College, Butler learnt the ropes in the investment banking business with JP Morgan before going on to work in various positions in Chase Manhattan Bank and Credit Suisse. His career journey led him to South Africa where along with colleagues in the investment banking community saw merit in the spread trading business.

“Basically, spread-trading is buying into the performance of a share or commodity. We deal with a community of brokers on a wholesale basis. Even if the value of a share is going down, what you are buying is the contract for difference (CFD) and therefore you can profit even if the share price is falling. The trader is engaging in the movement of the share and not the share itself. There is no stamp duty, broker fees or administration fees,” Butler explained.

He added that the company’s technology development will be directed from Dublin, but the majority of programming work will be completed in South Africa. “Our core offering is really our technology as far as brokers are concerned. It allows us to team up with incumbent brokers in South Africa and we have helped increase the size of their respective businesses. We are currently in talks with brokers in Ireland and Canada to further develop the service,” he said.

Global Trader was established on seed capital from Butler and his colleagues’ personal funds but two subsequent funding rounds have seen the company raise several million euro worth of venture capital.

Among the technologies under development at Global Trader are 2.5G and 3G mobile spread trading platforms. Butler explained: “At the moment our customers can check their balance and various trading prices using conventional text messaging, but over the next few months we will be introducing 2.5G and 3G modules to handle full transactions. We are also waiting for the mobile services and the networks to be robust enough to handle transactions in a secure manner,” said Butler.

By John Kennedy