Mario Fabbri graduated from the Politecnico di Torino University with a degree in engineering and holds an MBA from the Fontainebleau INSEAD Business School. In 1995, together with two other partners, he founded Directa SIM, an online trading broker pioneer, where he is now CEO.
How have you grown and maintained your business as the fields of technology and finance have evolved?
We started thinking about what later was called online trading in '93. We created a proprietary solution with a "modem to modem" phone connection between the trader's PC and the broker's computer. Finally, in March '96, we feel we could look for real customers...and discovered they were quite difficult to find. The concept of using a PC to buy and sell shares through a "modem" was totally new and strange in Italy-even the US was still trading "on the floor". But by 1999-2000 online trading had explosive growth. From May 1999 we started offering mobile options, possibly the first broker in the world to do. Then we made our way to trading on the NYSE and NASDAQ. Today, Directa has about one quarter of the Italian active traders' market, excluding home banking. This is thanks to our first class and innovative proprietary IT systems, such as Darwin, our build-it-yourself PC/Mac trading platform, touchTrader, our professional mobile platform for Apple IOS devices, and dLite our simple and powerful, use anywhere, HTML5 platform.
As a European investor, what do opportunities on the U.S. market look like for you and your customers?
We have been offering access to the U.S. stock markets for the last 15 years. We also offer BATS US for customers who prefer trading on an European-like "order driven" market. We are "Qualified Intermediaries" of the US Internal Revenue Service, so we can reduce the US withholding tax on dividends from 30 to 15% for many of our clients. Another services we perform, free of charge, is collecting refunds from U.S. class-action suits. This is something an individual investor would have a lot of trouble doing, but Directa has successfully participated in 300 lawsuits.
What advice can you offer new investors? Also, tell us about your International University Trading Challenge!
Be cautious with trading, especially in the beginning, and never risk more money than that you can afford to lose. Forex is trickier than other markets because currencies are rather stable, so leverages are higher. But when the market moves dramatically - it does rarely, but it does - the result can be devastating. Our advice is to systematically set up stop-losses: we have verified that the LMAX Exchange executes them correctly and efficiently.Currently, Directa is organizing the 7th edition of the International University Trading Challenge. This year, 594 students from sixteen European countries are taking part. We provide each team with 5,000 Euros. The profits go to the teams and Directa takes the losses. We have "loaned" a collective 785,000 Euros to the 157 teams. And for the first time we have a team from Poland: STOCK AND GO from Kozminski University of Warsaw.
