A last minute dose of volatility in the global energy markets has had a net positive effect on the world of margin derivatives trading. US-based FXCM, a leading multi-asset broker-dealer, reported strong metrics during the usually slow month of December. The figures coincide with industry peers data, thus reinforcing the relationship between trading volumes and market uncertainty.
December 2014 Retail Trading Metrics
- Retail customer trading volume(1) of $439 billion in December 2014, 5% higher than November 2014 and 61% higher than December 2013.
- Retail customer trading volume(1) for the fourth quarter 2014 was $1.4 trillion, 40% higher than the third quarter of 2014, and 53% higher than the fourth quarter of 2013. Retail customer trading volume(1) for the full year 2014 was $4 trillion, 0.5% lower than 2013. Volume from indirect sources was 47% of total retail volume(1) in the fourth quarter of 2014.
- Average retail customer trading volume(1) per day of $20.9 billion in December 2014, no change from November 2014 and 54% higher than December 2013.
- An average of 595,126 retail client trades per day in December 2014, no change from November 2014 and 61% higher than December 2013.
- Tradable accounts(2) of 230,579 as of December 31, 2014, a decrease of 1,728, or 1% from November 30, 2014, and an increase of 42,449, or 23%, from December 31, 2013.
December 2014 Institutional Trading Metrics
- Institutional customer trading volume(1) of $321 billion in December 2014, 6% lower than November 2014 and 120% higher than December 2013.
- Institutional customer trading volume(1) for the fourth quarter of 2014 was $1.1 trillion, 20% higher than the third quarter of 2014, and 105% higher than the fourth quarter of 2013. Institutional customer trading volume(1) for full year 2014 was $3.1 trillion, 52% higher than 2013.
- Average institutional trading volume(1) per day of $15.3 billion in December 2014, 11% lower than November 2014 and 110% higher than December 2013.
- An average of 43,981 institutional client trades per day in December 2014, 1% lower than November 2014 and 13% higher than December 2013.
FXCM altered its pricing model in September last year in a bid to provide a more efficient mechanism to traders. The lower spreads were welcomed by participants and thus impacted trading activity at the firm.
The firm’s CEO and President, Drew Niv, commented in a statement: “The new pricing FXCM introduced in the fourth quarter has been met with overwhelmingly positive feedback.
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While we are still early into our launch, we are already seeing strong results – with those geographic markets that introduced the new pricing growing 76% in FX volume in the fourth quarter of 2014 versus the prior quarter. That is almost double the 40% growth we saw in retail volume for FXCM as a whole.”
In the December monthly note, the firm also provided an update on its revenue expectations. Due to an increase in activity with the broker’s Japanese entity its forecast has been changed, the firm stating: “FXCM now expects retail revenue per million to be approximately $70 per million for the fourth quarter of 2014 versus the $75-80 per million expectation given on the third quarter of 2014 earnings call.” The firm reasoned the change on higher than expected volume from its Japanese subsidiary, as well as higher global trading in yen currency pairs where pricing is typically more competitive.”
FXCM was one of the first international non-Japanese brokers to cross the formidable $20 billion a day in average daily retail volumes mark. The multi-asset brokerage firm is recognised as one of the pioneers in retail forex due to its numerous accomplishments over the last fifteen years.
(1) Volume that FXCM customers traded in period translated into US dollars.
(2) An account that has sufficient funds to place a trade in accordance with FXCM trading policies.
(3) Total volume for FXCM customers domiciled in Japan, France, Germany, Hong Kong, Australia, United Kingdom, Canada and United States.