The top stories of the past week included some good news for the big brokers in the American Market, FXCM and GAIN Capital as well a story that showed one of their conflicts in Europe. On a less positive note, we heard of a number of alleged sexual assaults in the office of a brokerage in a CEO trial in the UK. Additionally, 2016 started off with a market crash in the East and a jump in the price of bitcoin- both might signal that the online trading industry is headed for a very volatile year.
On Monday the Chinese stock market marked its worst ever start to the new year as stocks slumped across the board. Trading in the country’s $7 trillion market for equities, futures and options hit the 7 per cent threshold which activates circuit breakers on the market at about 1:34 P.M. local time, due to a seemingly unending selloff.
Looking at other asset classes, volatility has spread, with the German Dax Index shedding more than 3 percent an hour into the trading day, while the Japanese Nikkei index closed the first trading session of 2016 finishing by a touch lower than that.
Very Wolf of Wall Street
On Tuesday,a London criminal court was presented with the testimonies of three women that used to work under CWM FX CEO, Anthony Constantinou, accusing him of a series of sexual assaults. One employee told the jury that he forcibly kissed her in the women’s bathroom, pulled her pants down, exposed himself and touched her in an intimate area.
Another employee said that during a meeting Constantinou throw her phone against a wall and later pushed her against a window and shoved a “big chunk of wasabi into her mouth” and then kissed her by “shoving his tongue down her throat as if she was a piece of meat.”
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On Wednesday FXCM Inc. revealed that it has begun a new partnership with German firm FXFlat. FXFlat is one of the few remaining big introducing brokers operating in Germany and is a partner of rival NYSE-listed brokerage GAIN Capital.
The sides explain that under the new partnership, FXFlat will now enable its customers to access the FXCM Trading Station as well as the MetaTrader 4 platform with FXCM’s execution.
BTC/USD at $450
On Thursday, after staying quite stable around the $430 mark since the new year started, the price of bitcoin reached $450 for the first time in 2016. The trading volumes also spiked which would suggest the price move was a result of a rush of new traders hitting the market.
Chinese bitcoin exchanges have been responsible for the majority of the cryptocurrency’s trading volumes for a long while now and it is possible that Chinese investors see bitcoin as a safe haven when the stock market is in trouble.
Big and Getting Bigger
On Friday we reported that both GAIN Capital (NYSE:GCAP) and FXCM Inc (NYSE:FXCM) enjoyed a positive month in November 2015 according to the latest CFTC figures, as retail client funds deposited with both brokerages improved for the month.
The data revealed a stagnant market, with both leaders of the pack maintaining their solid positions. FXCM Inc and GAIN Capital remain in the lead, with 33 and 24 per cent of client deposits in the U.S. respectively, while OANDA is in distant third spot, holding 18 per cent.