GAIN Capital December Trading Volumes to Drive Revenues Higher in Q4 2015

GAIN Capital has announced the final trading volumes figures for the month of December, highlighting FX and commodities trading.

GAIN Capital (NYSE:GCAP) has just released its final monthly trading volumes announcement for 2015 and the numbers are impressive. The company registered an increase of 15.2 per cent in its foreign exchange and CFDs over-the-counter business in December, netting average daily volume (ADV) of 12.6 billion, with the total for the month coming in at $276.9 billion, which is higher by 20.7 per cent.

Looking to highlight its performance during the fourth quarter, the CEO of GAIN Capital (NYSE:GCAP) Glenn Stevens stated: “As a result of increased volatility in key currency pairs and commodities markets in the latter half of Q4 2015, GAIN’s retail revenue per million tracked to our pro forma trailing twelve month level of $98, with retail volume generated from the indirect business representing 50% of total OTC trading volume in the quarter.”

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This compares to the $92 of pro forma trailing twelve month level of revenues on a per million basis which GAIN Capital (NYSE:GCAP) reported in November 2015 during its third quarter earnings report.

The number of active OTC trading accounts decreased month-on-month to 146,977, but remained much higher when compared to December 2014. The average daily number of futures contracts traded through the platforms of GAIN Capital (NYSE:GCAP) totaled 33,181, which is higher by 17.0 per cent than in November 2015 and by 7.0 per cent than in December 2014.

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GAIN Capital (NYSE:GCAP) reported that the total number of futures contracts amounted to 729,988, which was higher by 28.7 per cent than in November 2015 and by 12.1 per cent than in December 2014.

On the institutional front, the average daily volume at GTX totaled $16.2 billion, which is lower by 2.6 per cent than in November 2015 and by 6.3 per cent than in December 2014. The total GTX volume was $355.4 billion, which was higher by 2.1 per cent than in November 2015 but nevertheless lower by 6.3 per cent than in December 2014.

Revenue Composition and Outlook for Q1 of 2016

GAIN Capital, trading volumes, revenues, NYSE:GCAP
Historical Retail Revenues Composition, Source: GAIN Capital Q3 Earnings Presentation

The first quarter of 2016 is looking solid for GAIN Capital as the composition of revenues from indices and commodities has been getting closer to the foreign exchange side of the business. Overall the company’s revenues are looking to depend more and more on the higher margin CFDs business.

Depending on the region, the revenues from the retail business of GAIN Capital are also widely divergent since its U.S. based clients do not have access to the CFDs portion of the business. That said, outside of the CFTC regulated business of the company, provided that the massive volatility spike that we have seen in the first week of 2016 persists, revenues per million numbers could rebound further.

 

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