JPMorgan Client's $100 Million Mobile Phone Trade Sparks Trend

Many people are leery of - or prohibited by their employers - from executing large trades on mobile phones due to concerns about security.

But the news that a banking client did a $100 million mobile trade outside the office suggests that this type of significant financial activity is going to become both more readily available and more common. JL

Emily Morgan reports in the Wall Street Journal:

The $100 million mobile-phone trade that J.P. Morgan Chase & Co. CEO Jamie Dimon mentioned came from a European client who was using its app to trade outside the office. A hedge fund made a similar mobile trade that was worth four times more. Mobile trading  in forex at J.P. Morgan in the first quarter of 2017 rose 171% from the first quarter of 2015. Half of the bank’s clients using the platform are millennials.
The $100 million mobile-phone trade that J.P. Morgan Chase & Co. CEO Jamie Dimon mentioned Tuesday came from a European client of the bank who was using its app to trade outside the office.
The currency move by an undisclosed bank client in late 2016 was a simple transaction changing euros to dollars, people familiar with the transaction say.
While the deal showed the increasing size of trades being done using new bank technology, it was a relatively small trade in the foreign exchange market, where roughly $5.1 trillion changes hands each day. It also wasn’t the bank’s biggest currency trade on its J.P Morgan Markets mobile app.
In the first quarter, a hedge fund made a similar mobile trade that was worth about four times more, the largest mobile trade the bank’s forex desk has seen, people familiar with that trade said.
It’s becoming more common for the bank to let clients execute millions of dollars in foreign exchange trades using their cell phones, said Troy Rohrbaugh, J.P. Morgan’s J.P. Morgan’s global head of macro markets, which includes FX, in an interview.
Nearly half of the bank’s clients using the J.P. Morgan Markets platform are millennials, Mr. Rohrbaugh added. “Based on how they interact in their whole lives,” he said, “we want to be able to offer anything they can get on desktop, on mobile, in a user-friendly way.”
The ability to trade forex on mobile, launched in 2014, allows users to track the progress of their trade by phone.
The typical forex trade size on mobile is under $10 million, the bank says. Those trades are typically executed using the “Tap to Trade” function on the bank’s app, whereas much larger trades are often plugged into the app using an algorithm that automatically executes a trade over time under preset instructions.
Large mobile trades are picking up. And while they still represent a small percent of overall trading, the bank recently polled about 200 of its clients using the J.P. Morgan Markets platform and found about one-third of them would use a mobile device if they could. Many clients are blocked by compliance policies at their firms that cover newer trading technologies.
Still, overall mobile trading volumes in forex at J.P. Morgan in the first quarter of 2017 rose 48% from the first quarter of 2016 and 171% from the first quarter of 2015. The bank declined to give raw numbers.
On top of that, Mr. Rohrbaugh said the increase in average daily trading users on mobile in the first quarter of 2017 is up 13% from the first quarter of 2016 and jumped 51% from the first quarter of 2015.
The majority of clients who execute mobile trades at J.P. Morgan are global hedge funds, Mr. Rohrbaugh said. A person familiar with the matter added that the bank tends to see more rapid adoption from European clients. Of the mobile foreign exchange traders, 74% use iPhones, 8% on iPads and 18% use Androids, Mr. Rohrbaugh added.
Later this year, the bank has plans to launch mobile trading in metals, and ultimately it is working on expanding mobile trading tools to other markets such as U.S. Treasurys, said Mr. Rohrbaugh.