Customers are getting smarter - but that doesn't stop ETX thriving

So, for instance, what happened in the hours and days after the Japanese earthquake and tsunami, just the latest "black swan" event to rock financial markets?

"All of a sudden, everybody had a view on the yen," says Edwards, happy to report the Japanese fallout didn't see his punters staying on
the sidelines.

"Was the yen looking cheap or was it going to fall further? People were looking for the opportunity in market movements. Ultimately our customers are speculators. And they took a view."

The Edwards CV may make him look an unlikely boss in the spread-betting industry. He took a degree in agriculture from Cirencester and then did an MBA on the food industry at Larenstein University in Holland.

The vocation did not last long as he pitched up at Tradition after five years with City Index.

TradIndex was set up to service the spreadbetting predilections of Tradition's high net worth customers. It was a voice-brokered business for high-rollers. Edwards' job has been to diversify the business away from its roots, broaden the customer base, and take the business online.

"We knew we needed to have more scale and we needed to develop our web offering," he says.

"Between 2008 and 2011, we spent heavily - about £5 million - on technology, to the point
where we now have a very comparable platform [to
the opposition].

"Now we are developing mobile phone apps, and we have developed bespoke trade-through charting" - a function on your computer screen by which you can trade interactively via a graphic and chart your investments, allowing you to pick points for buy or sell orders, stop losses or limit orders."

But while the plan has been to make the digital offering as good as anyone's, Edwards says you still have to stand out. For ETX, he says, that means sticking to that level of personalised service to its original customers.

Just three years ago, almost three-quarters of ETX's business was still being done on the phone. That figure is now down to 35%, perhaps indicating the strength of the client base of high net worth individuals.

Edwards says moving the business to a broader base of client has meant educating the punter. It's
not all altruistic, he admits, calling that learning provision an "acquisition tool".

An educated punter comes back for more, and keeps playing. These days the spread bet firm rarely acts as the bookmaker but reaps the profit of the volumes trading either side of a spread.

"It is critical to educate less sophisticated customers in the types of products we have, in risk management and about markets in general," he says.

ETX does seminars and webinars and gets its profile across in the ubiquitous Manoj Ladwa, a media-friendly enthusiastic ambassador for ETX and the industry as a whole.

"If it helps them make informed decisions, if it helps them be aware of risk management, if it makes them trade better, then it makes them better customers. I know what you are going to say: 'that we want the customer to lose'. That is not what we are about.

"Ultimately, we do not want the customer to lose because we can then lose the customer. For us, the game is the spread capture game [the profit the spead better and CFD broker make in the spread between buyers and sellers]. In a high-volume, low-value game, whether the clients win or lose does not matter [financially] to us. What we want to see is the customer trading for longer."

Edwards admits that great rival IG Index is the gorilla in the spread-bet playground, and so is realistic about ETX's ambitions in a business where the punters have multiple accounts.

"What we want to do is to make sure we are the chosen second provider because of the levels of service we give," he says. "Most of our customers do not see what they do with us as a business.

"As it is not their day job, there is still an element of pastime about it. But don't get me wrong. They are doing it to make money. They are educated about risk and their approach around trading is ever more sophisticated."

So what does ETX stand for? "It does not stand for anything, and it does not mean anything," Edwards explains. "The two key things we were looking for when we were throwing around various names was that it was international, it would not cause offence in a foreign language.

"The other thing was we had to be able to get the domain name without having to spend thousands buying etx.com from some kid in California. We didn't have to, and that's why we are ETX."