The current times are characterized by uncertainties and constantly changing challenges. While it was the pandemic that had a noticeable impact on the global economy not so long ago, it is now geopolitical crises such as the trade wars triggered by the US. The financial markets cannot escape this and are reacting to events with increased volatility. Flow Traders shows how to profit from an increasingly fast-moving stock market world. The specialist for electronic trading in ETPs and other financial instruments earns when others are trembling. The best example was the coronavirus crisis: in 2020, the Euronext-listed company achieved a record profit of EUR 464.5 million.
Flow Traders does not act like a traditional investment firm and bets on rising or falling prices, but rather ensures that investors have sufficient liquidity to buy and sell at all times. The trading platform has set itself the goal of always providing bid and ask prices under all market conditions. This is achieved in two ways: firstly as a market maker on public exchanges and secondly over the counter in direct trading. Flow Traders trades worldwide, 24 hours a day and in various asset classes: From ETPs to equities and bonds to cryptocurrencies, the FinTech is broadly positioned more than two decades after it was founded. The Dutch company has a clear mission: 'We want to help make the global financial markets more transparent and efficient, reduce transaction costs and improve accessibility for all market participants.
The global multi-asset liquidity provider, which has branches in Europe, the USA, Hong Kong, China and Singapore, is particularly interested in digital assets at the moment. Thanks to broader acceptance and increasing institutional interest, these can ensure accelerated growth. Flow Traders is currently even considering its own crypto assets. After the EU created a uniform legal framework for crypto assets and services with the introduction of the Markets in Crypto Assets Regulation (MiCAR), Flow Traders founded the joint venture AllUnity together with DWS and Galaxy Digital. The aim of the joint venture is to issue a fully regulated euro stablecoin and thus drive the development of the on-chain economy. In addition, Flow Traders recently joined the Blockchain Association. This is one of the most influential organizations that serves as the collective voice of the crypto industry. Their mission is to drive the future of cyber currencies in the US by promoting the potential of blockchain technology.
Even if Flow Traders is already well positioned in the global financial landscape and has no shortage of visions for the future, the company's results are just as volatile as stock market prices. Earnings go up and down depending on market volatility. After the record year 2020 mentioned at the beginning, net profit fluctuated in a wide range between EUR 36 million and EUR 159 million in subsequent years. A look at the consensus estimates shows that this trend could continue in the coming years. After earnings growth of 15.9% in the current year, a decline of 6.7% is expected in 2026 and a slight increase of 4.2% is forecast for the following year. Due to this volatility, the market only assigns the share a moderate price/earnings ratio (P/E ratio) of around 7.
There have also been significant fluctuations in the share price recently. The presentation of the figures for the first quarter led to a sharp correction, with the share losing around a fifth of its value. Not only did the company miss expectations of EUR 142.1 million with revenue of EUR 135.1 million, but CEO Mike Kuehnel also surprisingly announced that he would no longer be available as Chairman of the Executive Board. However, in order to ensure a smooth transition in management, Kuehnel will stay on until the end of August.
As rapidly as the share price fell, the recovery was just as dynamic. The share was able to quickly close the gap that had opened. Within just 20 trading sessions, the price gap in the chart was ironed out by a V-shaped recovery. From a technical perspective, two scenarios are now possible following a so-called gap close: on the one hand, this may result in a strengthening of the trend. The price curve before the diver was clearly pointing upwards. Over a period of one year, the price has risen by 40%. On the other hand, the gap can also act as resistance and prevent or at least impede further progress. In order to ultimately be on the right side, it is necessary to constantly monitor the price trend.
A new series of leveraged securities - Leonteq is the first and only issuer in Switzerland to offer mini futures and warrants with knock-outs on Flow Traders - enables investors with an affinity for trading to make disproportionately high profits from the further performance of the share. Long products can be used to bet on a continuation of the upward trend, while the short counterparts turn potential price corrections into profits. All 7 leverage products currently on offer have an open-end structure. But beware: if a knock-out event occurs, there is a risk of total loss. The disproportionately high profit opportunities are therefore accompanied by high risks. Investors should therefore base the size of their position on the volume of their overall portfolio. The so-called "feel-good factor" must be taken into account here, i.e. the stake should be structured in such a way that no inner restlessness or nervousness arises.
We look forward to answering all of your questions about our products and how they are traded. Please don't hesitate to get in touch! Phone: 058 800 11 11, email info@leonteq.com or contact us here.