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MahiFX is a New Zealand based foreign exchange technology business founded in 2011 by David Cooney, a former global co-head of currency options and e-FX trading at Barclays Capital and his wife Susan Cooney, former head of electronic FX institutional sales in Europe for Barclays Capital.

On the 20th February 2012, MahiFX formally launched a new foreign exchange currency trading platform to cater to individual or “retail” foreign exchange traders.

The global foreign exchange trading market, commonly referred to as Forex or FX trading, is estimated to have an average daily turnover of approximately USD $4 trillion. These trading volumes that include over-the-counter (OTC) FX swaps and forwards, on-exchange FX futures and “spot FX” volumes are generated by institutions such as multinational corporations, governments and international banks, along with retail traders.

The browser-based MahiFX proprietary-authored trading platform was developed for use by retail traders who trade over-the-counter spot FX. Involvement in the currency trading markets for retail traders has historically been, and is still largely facilitated by a foreign exchange broker. MahiFX facilitates trades but differs in that the company operates as a “market maker” instead of the more widely used brokerage business model.

Origination Of The Brand Name
The word ‘Mahi’ has several meanings throughout the world but the founders cite the Maori, the indigenous people of New Zealand for the definition that the company name refers to. The Maori definition essentially translates to ‘our craft’ in English, which co-founder David Cooney is quoted as saying he felt was representative of how he and Susan Cooney view the MahiFX platform. The Maori definition also serves to acknowledge his lineage as a New Zealander.

A Market Maker, Not a Broker
The retail FX sector is largely populated by traditional brokerage or ECN providers as opposed to market makers, which are more commonly found in the institutional inter-bank FX trading space. MahiFX states that, as a market maker, its trading platform offers increased value to the every day retail trader through tighter spreads resulting from its ability to reduce transaction costs by operating a two-tier system which cuts out the middle man.

By comparison, most retail trading platform providers operate a three-tier system of trader to broker to market maker. The broker, or middle man, needs to add a layer of cost in order to make a profit. This layer of cost takes the form of a widening of the pip spread of each transaction. This accepted widespread practice of compensation for a provided service means varying degrees of higher trading execution costs for the retail trader; execution costs which banking or institutional traders are not subject to as a result of their two-tier only market-making status.

The stance from MahiFX is that there is no reason for a third tier mark up because the costs to participate are the same regardless of the size of the entity. The retail trader is therefore able to connect directly to the market instead of passing through a middle man. MahiFX, like other market makers, assumes the financial risk inherent in the transaction instead of assigning it to a third party liquidity provider. Trading through a market maker is effectively analogous to purchasing through a wholesaler instead of a department store.

The MahiFX Platform
It is not uncommon for FX trading providers to utilise third party programs with some individualised enhancements to provide their service to retail traders. One of MahiFX’s differentiators is that its trading platform program is entirely proprietary engineered which means that the company does not rely on third party providers for its technology.

Pre-Launch Promotion and Criticism
The pre-launch campaign for MahiFX centered on an interactive HTML5 infographic hosted on the domain holding page entitled: “You vs. John Paulson”. Site visitors were invited to enter their salary into an input box and the Infographic then generated an individualised and detailed summary of the entrant’s income and purchase power relative to John Paulson, a renowned ‘super hedge fund trader’.

The campaign drew mixed reviews. While many applauded the advertising concept, website design and underlying infographic technology, a minority took exception to what they considered to be an endorsement of capitalism and ostentatious spending power at a time when ‘Occupy Wall Street’ and similar movements were challenging the banking industry and culture of huge bonuses.

The idea behind the campaign, according to David Cooney, was tongue-in-cheek humour around the potential available to individual traders; not a suggestion that traders could hope to achieve the level of trading success enjoyed by John Paulson, through trading with the MahiFX platform.

Regardless of opinion, the infographic accompanied by a public relations and general information campaign succeeded in generating attention from consumer, FX, and design websites.

Additional Information

 * Corporate Links
 * Mahi FX Website
 * Mahi FX - John Paulson Infographic


 * Articles

Category:Financial services companies of New Zealand Category:Foreign exchange companies Category:Financial derivative trading companies