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Trust in online futures market: a study of Malaysia

Maryam Eslami (School of Accounting, University Kebangsaan Malaysia, Selangor, Malaysia)
Eboshogwe Imomoh (Engineering Department, First Hydrocarbon Nigeria, Lagos, Nigeria)

Qualitative Research in Financial Markets

ISSN: 1755-4179

Article publication date: 3 May 2016

Abstract

Purpose

Nowadays with the rapid growth of futures market, trust issues are increasing, especially, for individual traders because of the existing risks. However, to date there is no study that focuses on trust issues within online futures market and risks that threaten individual traders. This paper aims to understand trust issues in online futures market.

Design/methodology/approach

This study adopts an in-depth qualitative approach of online futures market in Malaysia through 30 interviews include senior managers, managers and individual traders who involve in futures online trading from three brokerage firms. Using agency theory, a new scale model, this study provides understanding on trust issues for traders in online futures market.

Findings

The paper provides empirical insights about trust issues that will occur as a result of information, risk and goal asymmetries between traders and brokers in online futures market. It suggests licensed and registered broker, platform familiarity, platform accessibility and usability, flexible contract size and leverage, providing segregated account and appropriate devices as key elements to overcome the mentioned asymmetries.

Originality/value

This is the first paper to investigate existing risk in online futures market and provide valuable implications for both traders and brokers to reduce the risk and increase the traders’ trust.

Keywords

Citation

Eslami, M. and Imomoh, E. (2016), "Trust in online futures market: a study of Malaysia", Qualitative Research in Financial Markets, Vol. 8 No. 2, pp. 118-129. https://doi.org/10.1108/QRFM-01-2015-0001

Publisher

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Emerald Group Publishing Limited

Copyright © 2016, Emerald Group Publishing Limited