A Study on the Innovative Business Models of Futures Commission Merchants in Taiwan
Date Issued
2007
Date
2007
Author(s)
Chen, Jui-Chueh
DOI
zh-TW
Abstract
From the international futures and options deregulated in 1994, Taiwan futures market began to grow up swiftly. In 1997, Taiwan Futures Exchange was set up to develop the Taiwan futures market and created several products. Until Nov 2006, the futures market volume is going to a new high to the 215 million contracts. Compared with the volume (344,000 lots) in 1994, the market volume increased 625 times. It was a fabulous achievement for this growing only 13 years.
However, even the futures market continues growing fast, the revenue of futures commission merchants (FCMs) is not increase the same way. To contrast with the market of 2001 and 2004, the whole volume increased 9.3 times but the gross profit before tax for all FCMs only rose 20%, which was a big gap between the volume and profit. One of the most significant reasons is owing to the change of trading construction. The rate of proprietary traders continues going up. Meanwhile, the quantity of local FCMs and similar business model also cause this terrible consequence. Therefore, the challenge becomes intensive so that to damage the profit of all FCMs.
To change this over-competitive situation, it is essential to develop a differentiation strategy. The purpose of this study expects to share the possibility of innovative business models so that can motivate more FCMs to contribute new innovative strategies.
The research mentions about four innovative business models that include corporate risk manage consultant project, the innovation of value-added consultant model, the creation of new customers, and strategic alliance with other Industries. Among these four models, the cooperation in cross industries, which FCMs may further establish new operating area by the combination of each professional, will be specially emphasized. Hopefully the models mentioned in the study can be efficiently utilized in FCMs industry, and FCMs can rely on their resource and competitive advantage to find out the most suitable market positions and creative strategies.
Subjects
期貨
創新收益模式
專營期貨商
選擇權
futures
innovative business models
FCMs
options
Type
other