Meristem’s Merifx Naira denominated derivative platform

My take on Meristem’s Merifx Naira denominated derivative platform

What a time at the official launch of the first naira denominated derivative platform by Meristem Securities Limited which held on Tuesday 6^th October, 2015 at Sheraton hotel, ikeja, Lagos. I was filled with high expectation and eagerness to see what this platform would do or offer since it is coming from a major player in the investing community. After the 2 hour presentation I immediately opened a demo account and proceeded to explore the platform. For two weeks of trading on this platform, being an experience trader, trainer and a certified financial technician, I believe it is high time I make my thoughts known to my readers. Please note every observation; commendations, condemnations, etc are independent of any external influence also not meant to influence anyone to either trade or not trade on the Merifx platform.

What is the Merifx Platform?

This platform is a derivative platform that gives everyone the opportunity to speculate on global financial instruments/assets. The essence is to take advantage of price fluctuation in instruments listed on the platform. It is also an over the counter trading place where participants can either go long or short at any given time in any tradable instrument with physical contacts. Let me rest here, for more information on what the Merifx is about visit www.merifx.com.ng

Pros and Cons of using the Merifx platform

Let us look at the pros in favor of this platform:

Access to more Global Financial tradable Instruments: with the Merifx platform opportunity had been made available to make money speculating on global tradable instruments that are volatile and liquid traded 24hrs/6days in the week. Nigerians can now trade in global equities, indexes, commodities (Metal and energy), and FX (major crosses) via this platform. Nigerians can easily move funds to financial markets that offer profit potentials at any point through via this platform. Examples of tradable assets are S&P30, German Dax, Gold, Brent Crude, Eur/Usd,  

Control: Traders has absolute control on what to, when to, how to, and what stake to trade at any given time. Traders don’t need a broker in order to execute a trade instead position orders are made directly from the platform. As regards risk/money management, being denominated in naira and since the minimum stake per unit is N1 it has its advantages in managing risk level. I would in subsequent articles do risk/money management analysis comparison using Merifx platform and other foreign denominated platform.

Friendly trading interface: I have found the trading interface of Merifx relatively very good. On the trading platform one can easily assess account summary, transaction details, market explorer, current positions, position orders, activity history, etc without navigating out of the platform.

Good execution: Placing either market orders or pending orders on the platform are relatively easy, with ability to know before hand the initial margin requirement in line with the stake level.

Relatively good support service

Cons: anything that is good most have it shortcomings, this I have also seen in the Merifx platform.

Dealing desk platform: for better understanding of the concept of Dealing Desk, here are some features of each platform type. To make your decision-making easier, here’s a summary of the major differences between Market Makers, STP brokers, and STP+ECN brokers:

Dealing Desk (Market Maker)	No Dealing Desk (STP)	No Dealing Desk (STP+ECN)
Fixed Spreads	Most have variable spreads	Variable spreads or commission fees
Take the opposite side of your trade	Simply a bridge between client and liquidity provider	A bridge between client and liquidity provider and other participants
Artificial quotes	Prices come from liquidity providers	Prices come from liquidity providers and other ECN particpants
Orders are filled by broker on a discretionary basis	Automatic execution, no re-quotes	Automatic, no re-quotes
		Displays the Depth of Market (DOM) or liquidity information

Reference: babypips.com

 

Limitation in maneuvering the analysis tools: Trading on the Merifx platform, I discovered there are a lot of limitations working with charting tools on the platform as such I had to make my analysis elsewhere and only placing trades on the platform. Also as a technical analyst/strategist, I cannot integrate my programmed proprietary trading system on the platform.

No realtime news feed: in a volatile market environment as this being offered, traders ought to be provided with global realtime news/events/reports this aid quick decision making via the fundamental releases.

Long processes in opening a live account: after having tried the demo account I decided to open a Live account (though not yet completed). Some of the challenges being faced here are the many documentations being required unlike other brokers who only ask for Means of identification and Utility bill (proof of residence) Merifx is requesting for additional such as passport photograph and specimen of signature which most like can turn on back.

Lack of educational tools: being relatively new to the Nigerian investing and trading community, there are needs for more educational resources which I am yet to find on the Merifx platform. This support service aids traders in making trading decision and help in understanding how to navigate through the platform.

Limitation in execution order – placing stop and take profit after order had been initiated

Meristem has taken a giant stride coming out with this initiative at a time the Nigerian capital market has not been helpful to traders and investors. I believe being in its pilot phase much improvement is expected to be made.