Currency Trading Hub Sited In Ada

March 15, 2004
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ADA — Everybody knows Ada is the home base of two global enterprises: Alticor and Amway.

Well … there's a third.

Instead of occupying half the Ada valley, however, Global Forex Trading (GFT) needs space in only two office buildings.

Yet it serves people and similar businesses in 100 countries. And in terms of trading volume, it does about $20 billion a month — that's "billion" with a "B."

Gary Tilkin, a commodities broker and securities analyst, founded GFT in 1997. At the outset, Tilkin — a native of Grand Haven and a graduate of Grand Valley State University — incorporated the company to serve commodities and futures traders.

But thanks to the Internet and heavy emphasis on software development, Tilkin's colleagues say he has made GFT a portal for something fairly new under the sun: personal access to speculate in the foreign exchange market — the biggest of all trading markets, with a volume estimated (though nobody knows for sure) at $1.5 trillion a day.

And according to GFT's COO, Mohammad Rasoul — a Grand Rapids native who is a convert to Islam — Tilkin plans to keep GFT headquartered in Ada.

"Gary had a futures and commodities' trading office in New York," he said. "But he just hated it there. So eventually, he closed that office and set up the new firm back here in his home."

And thanks to the Internet, he said, having the company situated in Ada has become irrelevant to its mission.

Before GFT began life, Rasoul said, the only way for someone to access the currency markets was a cumbersome take-it-or-leave-it procedure through major banks that moved large blocks of currency for commercial and investment purposes. Currency speculation, in fact, was out of the question for all but billionaires.

But Rasoul said that in less than a decade, high-speed Internet and topnotch software have opened the foreign currency exchange (Forex) to anyone with moderate wealth. And GFT, he explained, was one of the few firms in the right place at the right time with its own advanced trading software.

Rasoul said the Net — together with Tilkin's tight focus on customer service while haunting area colleges and job fairs to hire bright young employees — has taken GFT into a growth surge.

He said the firm weeks ago opened an office in Goldman Sachs' former quarters in Chicago's Sears Tower. It has nine sales people there and will increase that number to 30.

This summer, GFT also plans to open a second field office a few blocks from Ground Zero. Finally, it will have doubled its headquarters sales force by the end of the year.

In the longer term, Rasoul said, GFT is contemplating a Far East presence.

Rasoul told the Business Journal that he believes GFT is the only firm of its sort located outside of New York, London and, possibly, Chicago, and that it's probably the third largest of such companies.

Thanks to its software, GFT and its trading partners all have constant access to the same resources — in some cases, superior access — that Credit Suisse or Citibank does: real-time currency prices (in tabulated and graphic form), technical indicators and running financial news.

He said GFT not only works with other traders but also shops for prices among major and international central banks. Some regional banks are also among its currency-trading clients. 

Joe Force, the company's marketing manager, strongly stressed that one should not confuse GFT with companies running get-rich-quick infomercials on TV about currency trading.

Such firms, he said, are offering to sell foreign exchange market trading software for $3,500.

He said GFT gives its own proprietary software away.

He said that GFT's software — DealBook FX — is available to any firm or person that GFT accepts as a trading partner. But GFT doesn't accept just anybody.

He said, basically, GFT's carefully vetted trading partners are:

** Established trading firms not on the Department of Homeland Security list of terrorist suspects.

** Personal traders — also known as retail traders — whose names don't appear on that same list.

Force also stressed that GFT accepts accounts from individual traders only after satisfying itself that they are people who have enough personal wealth to tolerate high risk.

Currency trading, he said, is a risky over-the-counter market in which people, banks and governments speculate in currencies, sometimes with purchases and sales in the tens of billions.

He said GFT and similar firms operate on the edge of that market, keeping a close eye on what's happening within it. And what makes the market so volatile, he said, is that literally anything can cause the market to lurch even on an hourly basis.

"It's highly risky," Force said.

"It's not the kind of place where you try to parlay $1,000 into enough money to pay your college tuition."

Force and an assistant, Tim Gort, explained that whereas people trade on the Forex via the Internet, the Net also is where GFT initially meets most traders.

Gort said one of GFT's hottest sources of leads currently is an ad on the currencies page of Forbes.com. He said it produces contacts on better than 5 percent of its hits. "And these are warm calls, not cold calls, for our sales people," Gort added.

Should GFT and a speculator decide they can do business with each other, Gort said, the trader undergoes training with his new software and establishes an interest-bearing account — say $100,000 — with GFT.

Then, from the comfort of one's home or office, it's a case of placing orders via the Net with GTF. GTF itself makes the transaction from its main office in the Alten Oaks complex, 4760 E. Fulton St.

When a transaction occurs, software in the GTF office generates a sound effect akin to that of the ray guns used in the "Star Wars" films. Force said the noise level in the office recently arose to battle pitch when a rumor hit the market that Federal Reserve Chairman Alan Greenspan had died.

Even though the traders' news service (part of GFT's software) quickly quashed the rumor, Force said, the Canadian dollar rapidly dropped 50 points — also known as pips — relative to the U.S. dollar.

"That is high volatility," he said. "Fifty points is only a half cent, but if you have $2 (million) or $3 million on the wrong side of a Canadian-U.S. dollar trade, it's a pretty good-sized piece of money."

And trying to get on the right side of such trades, he said, is what currency speculators try to do. Most of them trade, he explained, in the major currencies: the dollar, the yen, the euro, the Swiss franc and the pound.

Fortunately, he said, high-speed Internet access and the software enable traders to act swiftly when the market becomes volatile. Rasoul said traders can signal a sale or a purchase and GFT literally can act upon it in one or two seconds.

Moreover, all three men noted that if traders are otherwise occupied, they can program their accounts to automatically sell or buy within certain parameters to prevent excessive loss and to take advantage of purchase windows.

The market is open around the clock, but trading is most intense from 7 a.m. through about 2 p.m., with the overlapping business hours of the big institutions in Europe and the United States.

"Currency trading is not exactly gambling," Force said. "And it's not as risky as futures, where you get locked in and can lose everything. But it is risky."

As far as Rasoul is concerned, the ability to enact trading decisions within a second or two is magical compared to his first years in the business.

He said that when he joined GTF, traders placed orders for futures by telephone and every order had to be recorded on three-carbon forms. Confirmation of orders also came by phone.

He said that part of the process became a logjam when a riptide of orders was coming in.

"Some times," he said, "you couldn't get confirmation on an order for 20 or 30 minutes. Your clients could be extremely worried because the market was changing while they were waiting. That's when customer service was really tough."

But he said that as good software and high-speed access came into the picture, that sort of anxiety simply disappeared.

"New concerns have arisen, of course," he said, referring to the many challenges peculiar to e-business and the Internet. He stressed that GFT is very well served by Iserve, but that it also has backup and plenty of redundancy.

But the key thing that happened, he said, was that the Internet granted personal access to the currency markets, causing many traders to move to that world from futures and commodities into currencies.    

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