GAIN Capital’s Retail, Institutional Volumes Incur Seasonal Decline

After scoring a substantial rise in volumes last month, GAIN's retail and institutional volumes dove during December.
Photo: Bloomberg

GAIN Capital Holdings, Inc. (NYSE: GCAP) has reported its volumes for the month ending December 2016, having had its retail business retreat MoM after one of the most volatile trading months of the entire year – the latest results exemplify an industry-wide trend for brokers, which have universally seen lighter trading this past month.

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One of the primary drivers of volatility in November was the US election and surprise victory by Donald Trump. Absent such a catalyst, volumes in December were noticeably lower, which were also influenced by the onset of the holiday season in the United States.

During December 2016, GAIN Capital’s retail OTC trading volume was reported at $189.1 billion, incurring a MoM fall of -26.4% MoM from $257.0 billion in November 2016. Across a yearly timeframe December 2016 painted a similar picture, plunging by -33.4% YoY from December 2015.

Additionally, the average daily retail OTC trading volume during December 2016 came in at $8.6 billion, falling -26.5% MoM from $11.7 billion in November 2016, coupled with a -33.4% YoY pullback from December 2015. Finally, active retail OTC accounts were numbered at just 129,036 in December 2016, inching lower by a factor of -1.6% MoM from 131,134 in November 2016.

Institutional Business Pointed Lower

In terms of its institutional metrics, GTX total trading volume was reported at $202.1 billion, justifying a move downwards of -11.2% MoM from $227.5 billion in November 2016 – the latest figures however were reflective of a substantial increase of 36.0% YoY from December 2015.

Moreover, ECN average daily institutional volume at GTX came in at $9.2 billion during December 2016, correlating to -10.7% MoM from $10.3 billion in November 2016 and 36.0% higher YoY from December 2015.

Finally, GAIN’s futures average daily contracts were reported at 26,160 during December 2016, down -20.5% MoM from 32,920 contracts in November 2016. This performance was exacerbated over a yearly timetable, retreating by -21.2% YoY from December 2015. Futures contracts on the whole however rose to 549,363 during August 2016, down -20.5% MoM from 691,324 in November 2016.

Year-End Analysis

With 2016 in the books, GAIN’s overall retail volumes were unable to capture the success seen in the year prior. Over a yearly basis, total OTC retail volumes were lower by -24.6%. The decline on the retail front of operations was slightly offset by an increase in institutional volumes, which have increased by about 11 percent when compared to 2015.

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