Canada's FX volumes slump in October 2011

The summer 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 helped boost trade volumes however Canada's Foreign Exchange Committee announced shocking results for the world's tenth largest economies FX trade volumes. Total average daily turnover in traditional foreign-exchange products in Canada dropped by 14.4% to $52.4 billion in October, from $61.2 billion in April.

The figures mark a 9.3% decrease from the year-earlier total, $57.8 billion, according to a survey by the Canadian Foreign Exchange Committee released in conjunction with the Bank of Canada. It was also the first decline in traditional foreign exchange turnover since April 2009.

The survey, with data collected from the eight banks with the largest foreign exchange activity in Canada, shows that the monthly turnover in October of traditional foreign exchange products, defined as spot transactions, outright forwards and foreign exchange Swaps Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Read this Term, totaled more than $1 trillion.

On an average daily basis in October, spot, outright forward and foreign exchange swap volumes decreased by about 8%, 11% and 18%, respectively, compared with the month of April 2011.

The average daily turnover of foreign exchange derivatives, which involve currency swaps and options, totalled $3.3 billion, marking a 15.4% decline from six-months-earlier figure. Currency swaps were lower by 17%, and options by 13%, according to the data.

In hindsight the worlds largest brokers like Saxo Bank, FXCM and Gain Capital trade between $10 to $13 billion a day.

Canadians intersted in FX can now trade with locally regulated CMC Markets and FXCM, although British Columbia has stricter rules for derivatives brokers.