CFTC FCM Data: US Retail Forex Funds Drop 2% in August, Interactive Brokers Steady

The CFTC issued its regular set of detailed data from reporting Futures Commission Merchants (FCMs) as of the end of August. While the foreign exchange market was silently preparing for the sharpest spike in FX Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term and trading since the beginning of the year, retail Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term funds have registered a modest drop by 2%.

After July’s steady increase, August didn’t bring in more client funds despite FX volatility and trading volumes slowly ticking up. Total retail forex funds dropped by $12.3 million, with GAIN Capital Holdings (NYSE:GCAP) shedding the most - $8.5 million, followed by OANDA with $3.3 million.

With FXCM Inc (NYSE:FXCM) losing $1.6 million, the top three brokers reported declines in retail forex funds in August. That said all of them reported much larger increases in July. The brokerage which stands out is the Interactive Brokers Group (NASDAQ:IBKR), which reported an increase by $4.4 million, which is an impressive rise by more than 11%.

In the view of Forex Magnates this big increase for Interactive Brokers, can be attributed to clients of the multi-asset brokerage switching their trading preferences back to foreign exchange after earlier this year we’ve seen the lowest G7 FX volatility in 21 years.

Looking at the market share data, client funds at FXCM Inc (NYSE:FXCM) holds 33% as of August (before acquiring the MT4 accounts from IBFX), which is higher by 1% when compared to July. Interactive Brokers (NASDAQ:IBKR) is the other FCM rising its market share by a full percentage point to 7% of the U.S. market.

OANDA and GAIN Capital Holdings (NYSE:GCAP) both lost ground, shedding 1%, with MB Trading, KCG America and IBFX all remaining unchanged. Expect the market share pie chart to change markedly next month as the data for September will take into account FXCM Inc’s (NYSE:FXCM) acquisition of IBFX’s MT4 accounts. The latter has announced that it will be focusing to offer the company's TradeStation solution to institutional clients.