The most traded products on Boerse Stuttgart in 2017 were two Vontobel participation certificates linked to bitcoin (Bitcoin Participation Certficate and Open-End Participation Certificate on Bitcoin) with over 27,000 customer orders executed with a total volume of more than €216m, but the 'real deal' from a trading perspective were wikifolio certificates which reached a new record high at the German exchange in 2017.

Investor orders on wikifolio certificates worth $316m were executed on the Stuttgart exchange - more than twice the trading volume achieved in 2016. This represented an increase of around 70% compared to 2015. Wikifolio certificates have constantly been amongst the most highly traded derivative investment products listed at Boerse Stuttgart. In 2017, the 50 most frequently traded investment products included no fewer than 15 wikifolio certificates. Around 7,600 wikifolio certificates are currently listed at Boerse Stuttgart. SRP has recorded 12 wikifolio underlyings in the German market including the Wikifolio-Index Nitty-Gritty E-Mobility, Wikifolio-Index emobility World, Wikifolio-Index Elektroautoproduktion and Wikifolio-Index AktienTipp Cannabis, among others

The platform has a "huge variety" of trading strategies from highly leveraged day trades to long term value investments, according to Andreas Kern (pictured), chief executive and founder of Wikifolio.com.

Active strategies

"We have almost everything you can image with stocks, ETFs or structured retail products," said Kern. "Investors love stock pickers as well as active strategies because of their radical transparency (every trade is visible in real time), uncheatable track-record and performance based fees. We have many outstanding talents who have proven their ability to perform for many years."

The platform has had "continous growth" since its launch in 2012 and is planning to focus "even more" on traders in the next 18 month including entering new markets and providing additional features for traders such as an application programming interface (API) for algos as well as a simplified trading app, according to Kern.

The German exchange is also seeking to capitalise on the 'exclusive listing agreement' with the social trading platform and the wikifolio certificates because it is "an innovative and growing trend", according to Alexander Höptner (below), spokesperson of the management board at Boerse Stuttgart.

"On the wikifolio.com platform, the know-how of experienced traders provides guidance and suggestions to other investors," said Höptner. "Another noteworthy thing is that fund managers can also use wikifolios to display their strategies. Of course, in social trading as with any form of trading, investors should bear in mind the risks as well as the opportunities."

The number of wikifolio certificates is growing steadily, according to Höptner. "Since August 2017, the number has grown from around 6,700 to approximately 7,600," he said.

The wikifolio platform has reported 100% growth in revenues while being profitable, according to Kern.

"Highlights of 2017 include the introduction of a collateral for all wikifolio certificates and a new and innovative way to measure the risk of dynamic strategies in real-time (the so called "risk-factor")," said Kern. "And of course our series B round with the Swiss PostFinance and French New Alpha (part of La Française Group)."

Wikifolio will continue to invest in leveraging its position as "the leading platform for transparent investing strategies", according to Kern. "In addition to being a platform, we will act more as a media house and broaden our target group," said Kern. "Blockchain technology will also enable us to provide additional services."

Exchange digititalisation

Boerse Stuttgart recorded a slight increase in trading turnover in 2017 with a new record for turnover in equities, while the turnover in exchange-traded funds (ETFs) was also high, according to Höptner. "[However], for securitised derivatives, 2017 was an average year," said Kern. "Owing to the historically low volatility, they offered few opportunities, especially for short term trading."

One of the areas where Boerse Stuttgart placed a strategic focus in 2017 was digititalisation, "with the aim of putting even greater emphasis on customers and their needs", according to Höptner.

"To achieve this, we set up a subsidiary, named Boerse Stuttgart Digital Ventures, which invests in fintech companies and enters into selective partnerships," said Höptner, adding that the company's first acquisition, in December 2017, was Sowa Labs, a startup whose core area of business is "realtime analysis of the rapidly growing, diverse financial market information on the internet".

"By the end of the year our digital subsidiary will be bringing out its first products, which will offer added value for a broad range of investors."

Höptner expects securitised derivatives to remain the most important asset class at the exchange on the back of the 42% of the trading volume recorded in 2017 with leverage products expected to drive most of the activity around the German blue-chip index Dax - "by far the most popular underlying" while investment products as the first choice for the Eurostoxx 50 and individual Dax equities as underlyings.

Boerse Stuttgart has been working with the wikifolio.com social trading platform since 2012 and is the exclusive listing venue for the wikifolio certificates issued by Lang & Schwarz.

The company offers a social trading investment platform where investors can create their own securities portfolios made up of tradable index certificates. Every trader on Wikifolio.com manages one or more hypothetical portfolios, representing their trading ideas and market views which can be turned into fully-fledged financial products, called "wikifolios" which are then listed on the Börse Stuttgart stock exchange.

Additional reporting Suzana Moni.

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