Interview with Andrei Litvinov

Corresponding talks ForexTimes Victor

Q: Andrei Vladimirovich, Please tell us about the new project of "Kalita-Finans": CFD on Russian stocks and indices.

AV: Contract for Difference (CFD - contract for difference (English)) - a new synthetic financial instruments that are based on shares of domestic companies (RAO UES, Lukoil, Rostelecom and others), as well as the RTS Index, MICEX, which may deal with the use of leverage. At its core, CFD on Russian stocks and indices - it is off futures tools, quotes, to mirror the movement of all Russian shares on major stock exchanges (MICEX and RTS), and active traders do not feel any inconvenience during the transition from operations in the stock market operations with the Russian CFD .

Q: And as far as legal and legitimate are these tools?

AV: Let's say that financial market development in this area ahead of legislation. No flash market in Russia has submitted to the law on commodity exchanges and exchange trade, several heads of the Civil and Tax Codes, as well as the draft law "On the derivatives (on the order of the commission term deals), which our Russian MPs can not take now for several years. Most recently, Federal Financial Markets Service (former FCSM), was to issue organizations working on the matter of the market, a license for operations with futures and options. The "Kalita-Finans" became one of the first to receive this license, and also held a certified dealer, working with clients.
Returning to your question about the legality of OTC derivatives on Russian equities, it should be noted that for several years, derivative financial instruments to shares of Gazprom proposes to United Financial Group, together with Deutsche Bank (Deutsche Bank). This scheme has been designed for foreign investors and has been checked for legal clarity in the Prosecutor General at the request of the deputy Yuri Saveliev. We went slightly further, and derivatives offered to our clients not only to shares of Gazprom, but also on other "blue chips", as well as indexes MICEX and RTS. Moreover, the services of this product can benefit not only elite foreign funds, but all wish to improve their terms of trade, both in Russia and abroad.

Q: And do not duplicate any new products are those that already exist in the domestic stock market? In other words, why require CFD on Russian shares, if the traders can contact the brokerage company and sell only the shares on the stock exchange (MICEX, RTS)?

AV: For several reasons. Watching the development of the Russian stock market, we drew attention to the fact that deytreding in Russian shares through a domestic broker has several shortcomings, which do not allow active players to fully earn. Here's you a specific example: You sell the shares of Norilsk Nickel and techniques of technical analysis found that they must soon fall in price. You urgently call your broker and ask to make a "short selling" shares "Norilsk nickel" in the hope to earn in the fall. What you broker says: "Sorry, these shares have not given speculators for short selling." Do you know why? Yes, just your broker keeps a large package of shares and either plays himself on them "in the short or they have tacitly agreed with the company not to allow speculators" to reduce the capitalization of the company. " Or one more example. In late September, early October 2004 the market shares of Mosenergo experienced explosive growth in prices. Stocks Mosenerngo "a few days went up by nearly 170% to 3.5 rubles. to 9.5. Could a simple exchange for a player this week to earn 170% using the standard brokerage services? Can. Theoretically. A little might. When asked the broker, "Why not open a long position on shares Mosenergo could hear and talk about the weak" Free Float "and a lack of equity in the market, etc. It was impossible to hear only the truth. But the truth is that any brokerage company there quietly gradation customers - those who understand and those who are worse. If you have less money to the brokerage account, than that of any Western investment houses - the client of your broker - and then your application will perform worse and shares at the right time for you will not. All these problems can be avoided by starting to sell our new tools.
Just note that all CFD on Russian stocks and indices in the company Kalita-Finance - are (in contrast to Russia's domestic shares from brokers) margin instruments, ie with them always, regardless of the situation on the Russian stock market, you can perform a transaction as a purchase or for sale (open short position).

Q: Does the commission will increase the cost of traders in connection with the new improved terms of trade?

A.: Quite the contrary. We hope that will be able to significantly improve conditions for customers working in the Russian stock market. It's no secret that for active traders in the amount of brokerage commissions, as well as numerous other charges is a significant problem and the problem of eating up the hard-earned profits. Russian brokers "proud" low commissions, and argue that "the following have no place." For example, one broker takes a commission only 400 rubles, with turnover not exceeding EUR 400,000. per month, while another suggested that 0.01% of daily turnover. It seems to be true - where much lower? But while expressing an unprecedented low prices, stock brokers shift part of the commission for hidden charges - such as: the trading platform, the key to the electronic signature platform for depository services, the exchange commission and VAT. Want to urgently transfer money from your trading account? Pay. Want ????????? shares of Gazprom? Since you have to take more commission.
Our committee - an unprecedented low. In addition, we do not take money for any platform, nor for the urgent withdrawal of funds. And over the nature of the tool allows our customers to save on the cost of depository, stock exchange fees, etc. Thus, summing up, we can say that the CFD on Russian stocks and indices are ideal for active intraday transactions with large amounts because of low fixed commission and the lack of additional costs.

Q: Does your company give credit to clients in transactions with financial instruments?

AV: Yes, of course. And again in contrast to Russia's brokers, whose loan amount limited to 1 to 2, ie one ruble own means a trader can get 2 ruble loans, the company Kalita-Finance, has gone toward its customers and the terms offered to margin lending 1 to 5. Thus, customers significantly increase its financial leverage, which they can operate in the market.

Q: What other services the company offers its customers "Kalita-Finance?

AV: In addition to trade contracts for difference (CFD) in the United States and to Russia's actions, we offer our clients the opportunity to trade on the FOREX for ruble and foreign currency accounts. Our environment is today one of the most attractive in Russia: a deposit of 1000 rubles, spreads from 2 points, the instantaneous execution of transactions on all instruments. Our client a few years became a few thousand traders from all over Russia and CIS countries. It is now also successfully operates and develops the Ukrainian branch of the company, which is fully employed in the context of looming financial and political crisis in the country. European customers served by the Czech branch of the company, offering one of the most affordable rates in the European market.
Work with corporate clients is to develop and implement strategies for hedging currency risks, where Kalita-Finance is actively cooperating with the biggest party of foreign exchange derivatives market in Russia - Citibank. We offer our clients a comprehensive service that helps them to avoid undesirable fluctuations in the exchange rate and the multimillion-dollar losses.
Over the past two years also increased interest in buying our software for Internet trading (draft www.dealingoffice.ru). Several Russian and foreign companies have made their choice in his favor.