FNG Exclusive Interview… For many retail traders Options trading remains something of a complicated black box. As retail traders have added new products and ways-to-trade in recent years (CFDs, futures, crypto, perps, turbos, prop trading challenges, prediction markets…), Options have lagged behind.

Investa is looking to change that.

We’re pleased to speak today with Investa CEO Alec Beasley after Investa received an FCA license in the UK about bringing Options trading to the masses, and a whole lot more.

FNG: Hi Alec, and thanks for joining us today. Please let us know a little more about Investa, and how the company came to be where it is now.

Alec: Investa is the first mobile-based investment app to offer zero-commission trading across stocks and options for UK retail investors.

I started my career facilitating options trading for professional investors at Citi. I was frustrated that they could access the market so easily, but it was near impossible for me to do so as a retail investor.

I thought if anyone was going to solve this pain point and allow retail investors to not just speculate and ‘do more with less,’ but also protect their investments against downturns using puts, it was going to be me.

So, I quit my job and started Investa full-time, with my co-founder Ross, from my parents’ garage.

Since then, we have launched the UK’s first zero-commission stocks and options trading app, raised £3.5 million from over 1,000 individual investors, facilitated the trading of over 8,000 option contracts and recently received full direct authorisation from the FCA, after previously operating as an Appointed Representative.

FNG: You’ve pointed out before that very few retail traders (under 2% in the UK?) trade Options. Are Options too complicated for retail traders?

Alec: The statistic in the US is 36% of young retail investors have traded options. In Europe, we believe this to be less than 1%.

Given that over one third of young retail investors in the US have traded an option, and UK/European retail investors are just as sophisticated, I would argue that they are not too complicated for retail investors.

In my opinion, the opportunity gap between 1% to 36% isn’t down to risk appetite or cultural differences; it’s because European brokers have pushed retail investors towards OTC derivatives instead – CFDs in the UK, Spain, Netherlands, Poland, and Italy and Structured Products like Warrants and Turbos in Germany and Switzerland.

This is one of the markets we’re disrupting, moving retail investors away from OTC derivatives, where over 80% lose money, and onto exchange-traded listed options.

For reference, CFDs are essentially banned in the US for retail investors, so their preferred recourse to trading leverage is listed equity options.

FNG: Getting an FCA license is certainly a big step. Is Investa also looking to expand abroad, or (at least near term) will you be focused on the UK market?

Alec: It most certainly is. There was a lot of hard work and effort that went into receiving our authorisation, as you’d imagine.

We’re absolutely looking to expand, and you can expect to see us in Europe in due course.

It’s not just about the business opportunity; it’s about what the availability of options does for retail investors. Being able to protect against downturns is something retail investors should have the ability to do. It’s a necessity, and we had record volumes in March, driven by a significant amount of buying of put options from retail investors.

FNG: Will Investa remain an Options trading platform, or are you looking to add other tradable assets such as CFDs, crypto, or “real” stocks?

Alec: You can trade stocks on our platform already. We’re not looking to add CFDs, but the tradable assets on our platform will continue to increase over time, so I wouldn’t rule out seeing crypto or bonds on our platform. Our users can also submit requests for stocks or ETFs they want added to the app. Each new addition automatically includes the ETF or stock’s listed option contracts.

FNG: What else can we expect to hear from Investa in the coming months?

Alec: We’re currently only available on iOS, but Android will be launching this summer, which will expand the audience that can trade options on Investa significantly.

Covered calls and cash-secured puts are also being introduced shortly, which will enable investors looking to generate income on the stock or cash to earn a yield. This is another feature I‘m very excited about; so many users have been asking for it, so we already know there’s a big untapped demand.

We’ve also just launched two-year LEAPs (Long-Term Equity Anticipation Securities), which are essentially options that have expiration dates longer than one year. Then, in the next two weeks, three-year LEAPs will be available.

Features and new products are being launched as quickly as we can move, so watch this space, and if your readers are interested in getting updates, they can follow us on LinkedIn or Instagram to stay in the loop.