Saxo Bank Announces 3% MoM Rise in ADV; Total Volumes Decline 8.6% YoY
The Danish broker publishes a mixed bag of results although perfomance metrics remain broadly stable. Client collateral has risen 40%
Saxo Bank today announced trading volumes and metrics for August 2014.
Join the iFX EXPO Asia and discover your gateway to the Asian Markets
The Danish-based multi-asset brokerage saw Average Daily Volumes (ADV) rise 3% from the previous month, but total monthly volume declined slightly from $215 billion to $212 billion – a 1.4% decline.
Suggested articles
Why Ethereum Needs Layer 2 Solutions More Than EverGo to article >>
In August, the amount of client collateral held by Saxo Bank rose from $9.71 billion to $10.01 billion – a 3% increase compared to July.
Taking a look at today’s figures from a year-on-year perspective, the results show a more tepid picture.
Compared to August 2013, ADV fell 4.7% from $10.6 billion to $10.1 billion and total trading volume fell 8.62% from $232 billion to $212 billion.
The outstanding highlight from Saxo Bank’s published metrics is the 40.2% YoY increase in client deposits, which are likely due to low FX market volatility and the absence of extensive moves in major FX pairs over the past year. A steady build up of client collateral in currently slow market conditions could result in strong revenue outperformance for the broker, if and when implied volatility begins to pick up in the FX market.
From the two curves, it seems like the deposits are from traders trading long term, jumping on the stock rally.
Long term holders do not generate revenue for brokers – question is what will happen once the stock market turns – will these new accounts continue trading in the long term, or will they begin to trade i the more speculative timeframe and thereby generate more revenue ?
Only if traders begin trade in lower timeframes may make a turn around of the trading volume as I see it.
From the two curves, it seems like the deposits are from traders trading long term, jumping on the stock rally.
Long term holders do not generate revenue for brokers – question is what will happen once the stock market turns – will these new accounts continue trading in the long term, or will they begin to trade i the more speculative timeframe and thereby generate more revenue ?
Only if traders begin trade in lower timeframes may make a turn around of the trading volume as I see it.