FXCM February Volumes Dive 41% as Post SNB Clouds Persist

FXCM volumes drop 41% in February as customers appear to be reducing their exposure with the broker following its huge

FXCM has posted its trading metrics for February along with its Q4 and full year 2014 financial results (Financial Report article posted here). For the month, retail volumes were 41% lower to $267 billion, compared to $450 billion in January, calculating to $13.3 billion per day. The volume performance was well below the 20% drop experienced by GAIN Capital, but matched the 41% decline at Saxo Bank. So far in March, FXCM released that average daily volumes were 11% higher than February.

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Elsewhere, the broker’s institutional division didn’t fare much better with volume declines of 38% to $162 billion compared to $255 billion in January. Average daily volumes were 33% lower compared to January at $8.1 billion and also underperformed peer trading venues, such as the CME, EBS and Hotspot where average daily volumes fell 21%, 27% and 23% respectively. While the institutional unit fared slightly better than retail, it is worth noting that at $255 billion for January, institutional volumes had already dropped substantially from their 2014 high of $393 billion set in October.

The decline in volumes appears to indicate that FXCM is experiencing difficulties in its retail division which suffered a reputational hit after the broker was forced to raise  $300 million in emergency financing due to January’s Swiss franc flash crash. After initially reporting that volumes had remained strong in the days following the Swiss franc volatility, FXCM’s activity fell over 50% during the last few days of the month.

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February’s data reveals that despite assurances to clients of their financial strength, clients appear to be limiting their exposure to the broker and trading less. Surprisingly though, active accounts did show an increase to 194,517 from 193, 546 in January. Today’s report comes after FXCM released late Wednesday a minute by minute review of what transpired on the fateful January 15th day. The data showed that FXCM was able to fill 18% of its clients EUR/CHF orders at 1.1700 or above, with the remainder filled above parity when liquidity returned. According to the firm’s finding, the results showed that their circuit breakers prevented clients from losing greater amounts as other brokers and trading venues experienced fills well below the 1.00 parity level.

February 2015 Operating Metrics

Retail Trading Metrics

  • Retail customer trading volume of $267 billion in February 2015, 41% lower than January 2015 and 12% lower than February 2014.
  • Average retail customer trading volume per day of $13.3 billion in February 2015, 38% lower than January 2015 and 13% lower than February 2014.
  • An average of 513,931 retail client trades per day in February 2015, 22% lower than January 2015 and 28% higher than February 2014.
  • Tradeable accounts of 222,719 as of February 28, 2015, a decrease of 360, or 0.2%, from January 2015 and an increase of 31,997,or 17%, from February 2014.

Institutional Trading Metrics

  • Institutional customer trading volume of $162 billion in February 2015, 36% lower than January 2015 and unchanged from February 2014.
  • Average institutional trading volume per day of $8.1 billion in February 2015, 33% lower than January 2015 and unchanged from February 2014.
  • An average of 31,242 institutional client trades per day in February 2015, 13% lower than January 2015 and 11% lower than February 2014.
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