Hotspot FX Activity Declines in February ADV to $26.4B

The leading ECN for foreign exchange derivatives contracts, Hotspot, reported trading volumes for the month of February. Volumes dropped considerably during the month, which also suffered from a drop in market 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. The firm transacted over $528 billion during the entire month. However, the figure was 26% lower from figures reported a month earlier.

The US-based venue, which was acquired by BATS, reported that average daily trading volume for February was $26.42, lower then January’s figure of $34 billion.

Trading volumes are correlated with market volatility. In the second half of 2014, Hotspot’s volumes spiked in key months that were heavily impacted by international geo-political events. In September 2014, the Sottish referendum, coupled with the EU’s quantitative easing programme saw total monthly volumes sky-rocket to $841 billion, the highest for the year, with the average daily number of transactions at $38.2 billion.

The latest drop in volumes puts monthly totals below the $600 billion mark for the FX ECN, figures not seen since July 2014. During the second half of last year, the firm’s average daily volume was consistently above the formidable thirty-billion mark.

The recent M&A activity affecting the ECN, with BATS acquiring the venue, is believed to be creating a stronger link between OTC and exchange traded products in the 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 markets. The move also signifies BATS’ first move into the congested spot FX space. Previously the firm has been reported as stating that it is reviewing new products such as contract for differences (CFD).