Gain Capital Sees Retail Volumes Decline MoM and YoY

The preliminary data for June 2018 shows a lackluster month in trading volumes for the broker.

The parent company of Forex.com and City Index, Gain Capital, has announced its monthly metrics for June 2018. The group’s latest volumes show a lull in trading activity with the broker, with both its retail and institutional trading volumes posting month-on-month declines.

Retail segment

The retail segment for Gain Capital recorded both lackluster month-on-month and year-on-year results. The over-the-counter (OTC) trading volume for June this year was $213.9 billion, a decrease of 12.1 percent. This is a decline of 11.5 percent when compared to June’s 2017 monthly volume.

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The average daily trading volume for OTC was $10.2 billion in June this year. This is down from $11.1 billion from May 2018 and $11 billion from June last year.

The 12 month trailing active OTC accounts was 130,018 in June, 1,018 less than in May 2018. On a year-on-year comparison, this is 3.1 percent less than in 2017. June’s three-month trailing active OTC accounts was also down by 1.2 percent month-on-month and 8.2 percent year-on-year.

Institutional segment

The institutional segment for Gain Capital saw mixed results. Its electronic communication network (ECN) volume was $297.5 billion dollars, a notable decrease of 22.8 percent. However, this was an increase of 24.9 percent year-on-year.

The average ECN daily volume for June was $14.2 billion. Following a similar pattern, this was down 18.9 percent compared to May, but up 31.5 percent from June last year.

The broker’s swap dealer business was the only segment to see both monthly and yearly gains. The total volume for June saw an increase of 23.7 percent month-on-month, coming in at $64.8 billion. More noteworthy is its yearly increase, as June’s 2018 volume was more than double 2017’s data, with an increase of 102.5 percent.

The average daily volume was $3.1 billion, which was also a decent increase from May’s volume of $2.4 billion. The yearly change was again significant, as this year’s figure for June was 106.7 percent up from last year.

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Futures segment

The futures segment did see some year-on-year gains, but when compared to May 2018, the results were also down.

The number of futures contracts decreased by 10 percent from May, sitting at 625,260. However, this was an increase of 7.3 percent from June 2017.

The average amount of futures daily contracts follows the same trend. Compared to May, the volume is down by 5.7 percent at 29,774 but that’s a 12.4 percent increase year-on-year. The 12 month trailing active futures accounts were also 0.6 percent down from May this year and 0.1 percent down when compared to June 2017.

 

Forecasts

Commenting on the results, Glenn Stevens, Chief Executive Officer of Gain Capital said: “operating metrics for the second quarter demonstrate our continued progress in executing on our revenue volatility reduction initiatives,”

“March, enables us to optimize our hedging activity and reduce variability in our results. These efforts helped deliver revenue per million of $107 during the second quarter. We are pleased with our progress during the first half of the year and, following the sale of our GTX business, feel we are in an even stronger position to continue to drive growth and profitability as we focus on our core retail business.”

Gain Capital has also updated its tax rate assumptions for the full year of 2018, following the completed sale of GAIN’s GTX ECN business on June 29 this year. According to the statement, the broker expects its tax rate for the full year to be approximately 27-28 percent, excluding the GTX business.

When including the GTX ECN results for the first half of 2018 and one-off costs, Gain Capital expects its tax rate for the full year to be approximately 13 percent.

In addition, the company expects its weighted-average common shares outstanding for the second quarter of 2018 to be around 45.3 million shares.

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