Retail brokerage giant GAIN Capital announced its trading results for March this Monday.
The US firm saw a marked year-on-year decline in its trading volumes.
In March of 2018, the company reported over-the-counter (OTC) trading volumes of $262.8 billion.
For the same period this year, the firm reported a total volume of $168.9 billion – a 35.7 percent decrease.
Looking at the daily average trading volume for the same two periods, things were slightly better for GAIN Capital.
Last March, the broker reported a daily average OTC trading volume of $11.9 billion. In March of this year, the same figure was $8 billion – a 32.8 percent decline.
Low volatility + leverage caps = low volumes
Looked at from a month-on-month perspective, GAIN Capital’s performance in March of this year was more understandable.
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In February of this year, the company reported total OTC trading volumes of $134.4 billion.
As noted, the firm said that it secured $168.9 billion in OTC trading volume this March.
That meant that, from a month-on-month point of view, the firm’s trading volumes grew by 25.7 percent.
Of course, there are usually only 28 days in February which means total trading volumes can sometimes be misleading.
In this instance, the average daily trading volume for GAIN Capital in February was $6.7 billion. This was still 19.4 percent lower than March’s $8 billion.
Though volumes were comparatively low in March, this was to be expected.
Low volatility in the global foreign exchange markets means most brokers reported low trading volumes in the first quarter of this year.
The European Securities and Markets Authority’s product intervention measures, which place leverage caps on retail traders, have also driven down brokers’ volumes since last August.