FXCM Inc (NYSE:FXCM) has issued an announcement revealing a set of studies the company made of its execution of trading orders. The information obtained from the data collected from the clients of the brokerage show a stark contrast to the futures markets.
According to the data, retail clients of FXCM received better execution than if the same orders were executed on the futures market, or the interbank market for that matter.
Hard data shows that FXCM’s retail clients received equal or better prices in 90.83 per cent of cases. The company states that on an aggregate basis, its clients have saved $36.3 million due to better execution prices. The execution was better than the futures price on 86.47 per cent of the trades, equal to the futures price in 4.36 per cent of the cases and worse than the futures price in 9.17 per cent of the trades.
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Looking at the interbank FX market, FXCM clients got equal to or better pricing 95.31 per cent of the time. This resulted in prospective total savings amounting to $55.1 million. FXCM’s prices were better than the interbank price on 92.19 per cent of the occasions, equal to the interbank price 3.12 per cent of the time and worse on 4.69 per cent of the trades.
The company’s CEO Drew Niv explained: “We wanted to explain why FXCM’s liquidity providers provide better pricing on our retail trading platform for retail clients.”
“Our liquidity providers are only allowed to be price makers for our retail clients and not price takers. Only our retail clients can take a price which protects the market maker from potentially being picked off by larger or faster predatory market takers, making them more comfortable and giving them the ability to make a market based on quality of price and liquidity rather than speed,” he explained.