GAIN Capital’s December Volumes in the Red After Seasonal Lull

Both retail and institutional trading volumes fell in December, on par with other brokerages around the industry.

GAIN Capital (NYSE:GCAP) has reported its aggregated trading volumes for the month of December 2017. The group’s latest volumes reflect a seasonal lull that has been observed across the retail and institutional trading industry heading into the year-end.

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December was pegged as a largely lackluster month in terms of volumes, with retail brokerages worldwide seeing a consolidation in their respective trading statistics. In the FX space, this proved to be the case in the US, UK, and Japan, with a seasonal decline and a lack of any volatility failing to spark much trading.

For GAIN Capital’s part, the latest reading follows just one month after a slight rebound in its retail FX volumes. December however, would erase any momentum the group had in Q4 2017. In particular, December 2017’s retail OTC trading volume came in at $163.6 billion, down 21.0 percent month-over-month from $207.0 billion in November 2017.

The figure was also lower over a yearly interval, with GAIN’s latest retail volumes underachieving its December 2016 volumes by 13.5 percent. In terms of its average daily OTC volume, GAIN Capital reported $8.2 billion per day in December, dropping by12.8 percent from $9.4 billion per day in November 2017.

This decline was primarily attributed to seasonal factors, with North America observing multiple holidays. A lightened trading schedule helped cap volumes during the month, with December ranking with August as amongst the slowest months on average. That markets experienced any lack of market drivers also contributed further to this trend during December.

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On a positive note, the average number of OTC accounts at GAIN Capital did manage to see a slight rise, climbing marginally to 132,262 accounts in December from 131,825 accounts last month. This marks a 4.5 percent increase year-over-year relative to December 2016, following a reading of just 126,528 accounts.

Institutional space also sees decline

GAIN Capital also experienced a decline in its institutional volumes, despite seeing a notable uptick in this segment for much of 2017. December saw an ECN volume reported at $216.2 billion, down 19.2 percent from $267.7 billion last month. The figure is still 7.0 percent higher on an annual basis, with 2017 vastly outperforming 2016 in the institutional segment.

Moreover, ECN average daily volume came in at $10.8 billion per day in December 2017, down from $12.2 billion in November, or -11.5 percent. On a yearly basis, the latest figure was however higher by 17.4 percent relative to its 2016 counterpart.

Of note, swap dealer volume did experience a much wider decline in December 2017. GAIN’s swap dealer volume was reported at $30.5 billion, retreating -42.2 percent off of $52.8 billion in November 2017.

The metrics follow after this week’s key trading announcement by GAIN Capital. With demand for crypto trading continuing at a frenetic pace, GAIN Capital has introduced Bitcoin trading for its Australia and Singapore-based City Index subsidiaries.

The group enjoyed a solid bump in share prices (NYSE:GCAP) after it announced that it would offer the asset to its European clients. Some analysts on Seeking Alpha have upgraded their outlook for the company causing a sharp spike higher in the value of the shares of GAIN Capital.

Consequently, Bitcoin trading is now be available to clients of GAIN Capital that are based in Singapore and Australia. Both branches of City Index are regulated by the local authorities, the Monetary Authority of Singapore (MAS) and the Australian Securities and Investments Commission (ASIC).

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