Do you think that the Australian stock market IS the ASX? Few people know that there is another exchange accounting for 20-25% of daily trades. Chi-X is an alternative exchange and a competitor to the Australian Securities Exchange (ASX) within the Australian investment market.
Chief Executive Officer of Chi-X, Vic Jokovic, has worked as a broker his entire career, for large brokerage firms such as Deustche Bank. He shares his early experiences on the trading floor, a physical exchange with lots of noise, high energy and ‘Chalkies’ writing prices up onto chalk boards. It was the days of single computer monitors on lazy-susans and ashtrays built into the trading desks. Exchanges have rapidly progressed to become the digitised and automated on-line platforms that we see today.
We discuss Chi-X since its launch in 2011 and how it has fostered price competition in a market that had been monopolised by the ASX. Chi-X charged brokers fees significantly less than the ASX, forcing them to lower their fees to remain competitive. Vic takes us through the seamless use of Chi-X as an investor, often not realising when we have bought from the Chi-X exchange. A more profound way that investors, like you and I have benefited, is from reduced commissions that have been passed on to us as a result of lower fees that brokers face when trading.
One of the topics discussed that I found particularly interesting, is a unique product offered by Chi-X, known as Transferable Custody Receipts, or TraCRs. Vic explains how these can give you access to US shares without the hassle of setting up an international account, dealing with foreign exchange and copious amounts of paperwork. Here's a link to find out more.
With Australian investors tending to invest predominantly in Australian shares and property, the opportunity to buy shares directly from major US companies with minimal fuss is remarkable.
Throughout this episode, Vic also shares some dad advice that he has been passing on to his children, as well as some of the worst mistakes and most important lessons picked up throughout his career.
Below are a couple of images of stock market chalk boards back in the days when dinosaurs roamed the earth.
Chi-X is the holder of an Australian Markets Licence to operate a financial market in Australia. Any information is provided for informational purposes only – it is not intended to be financial product advice. Under no circumstances is it to be used as a basis for, or considered as an offer to, engage in any activity or purchase or sell any security, or as a solicitation or recommendation of the purchase, sale, or offer to purchase or sell any security. To the extent permitted by law Chi-X makes no representations or warranties and excludes all liability in relation to the information provided.
Shares for Beginners is for information and educational purposes only. It isn’t financial advice, and you shouldn’t buy or sell any investments based on what you’ve heard here. Any opinion or commentary is the view of the speaker only not Shares for Beginners. This podcast doesn’t replace professional advice regarding your personal financial needs, circumstances or current situation.
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