Commodity markets have been extremely volatile over the past 18 months as participants grapple with Covid-19, extreme weather events in key markets like Texas and the Russian invasion of Ukraine.
Access to liquidity, real-time data analytics and access to real-world market knowledge were key. OTC Global Stocks (OTCGH), winner of this year’s Energy Risk Brokerage of the year award, offers its clients all three of these key services.
Its clients have benefited from the liquidity pools of its network of nearly 20 brokers and gained access to its hybrid voice/electronics EOXLive platform and from the expertise of its brokerage team, which includes former traders and planners from all commodity markets, says Javier Loya, Co-CEO and Chairman of OTCGH.
In addition to execution EOXLive – launched in 2012 – allows clients to receive real-time analysis and live market data from the organization’s brokers. It combines publicly available data with proprietary trading information and quotes to generate real-time charts. This, together with the real knowledge and expertise of the brokers, makes it possible OTCGH Providing logistics and freight market expertise to clients in moving physical goods around the world.
“Regardless of the execution method, there is a broker behind every trade,” says Joe Kelly, co-CEO and President of OTCGH. “This confidence enables our clients to receive guidance and clear execution while accurately and fully understanding risk in complicated, fast-moving and seemingly unpredictable market conditions.”
Headquartered in Houston, Texas and New York City, the brokerage firm reported 14% annualized revenue growth from 2020-21. Additional acceleration in early 2022 resulted in a more than 30% increase in sales in February 2022 compared to the same month last year, Loya says.
The company has also expanded into two new markets in the last 18 months.
“Despite ongoing challenges on the commodity markets OTCGH saw opportunities to grow and better serve its customer base,” says Kelly. That included an expansion into shipping in 2021, which Kelly says was a “natural progression” for the brokerage business. “Given our market share across all commodities, covering every aspect from physical product to hedging and freight, it only made sense for us to add the shipping component to our offering,” he says.
OTCGH began physical ship brokerage through its subsidiary Oil Brokerage in early 2021. Starting in London, this offer was extended to Dubai in early 2022. In addition to the offices in New York and Houston OTCGH also has a physical presence in Chicago, New Jersey and Louisville in the United States USas well as in London, Geneva and Singapore.
The shipping team currently covers clean vessels — mostly medium and long-haul tankers — but Kelly says positive response from the market has encouraged the company to consider other products and vessel sizes in 2022.
In another new development OTCGH introduced an ethanol desk in October 2021 as part of its Ionic Energy United Kingdom Division to capture activity in this market spurred by European Union ethanol blending mandates. Over time, says Kelly OTCGH hopes to develop a fully connected global ethanol desk that integrates physical and financial market flows. The next step will be to start a US Ethanol Desk later in 2022 to align with similar regulations in that market, he explains. The European team has also secured a paper deal for Asia to help develop a market in that region.
OTCGH is structured as an umbrella organization for nearly 20 independent brokers active in the global commodity complex in markets such as oil, power, natural gas and refined products. Collectively, these companies serve more than 500 institutional clients and trade at hundreds of commodity delivery points in Asia, Europe and America.
“OTCGH brings together high-performing brokers with an entrepreneurial spirit, empowering them to thrive in this fast-paced market by delivering greater efficiencies through value-added services to clients,” says Kelly.
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