Retail FX Deposits Held at US Brokers Drop $13M in August

Data from the US securities regulator for August 2020 shows that registered retail FX platforms lost more than $13 million in clients’ deposits, coming in at $556 million. The 2 percent drop came as trading activity surged in other segments amid a boom in retail investments during an unprecedented time for financial markets.

After consecutive increases in its market share, Interactive Brokers suffered a drop in retail deposits in August 2020. Specifically, the broker’s net balances decreased by $6.3 million, or 9 percent, to $64.7 million. In contrast, the listed brokerage firm was the best performer in June, after recording an overall rise of $6.6 million, or nearly 10 percent month-over-month.

Although in September, the electronic brokerage segment at Interactive Brokers, which deals with clearance and settlement of trades for individual and institutional clients globally, experienced a rush of activity with volumes rising by 132 percent year-over-year and nearly 12 percent on a monthly basis.

Only two of the five FX firms listed notched slight increases in Retail Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term Obligations Obligations In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you Read this Term, this time was IG US, which saw its clients’ assets grow by $191,000, or nearly 1 percent from the prior month.

Other highlights from the CFTC’s monthly report shows that Nebraska-based TD Ameritrade has racked up $385,000 in additional deposits, which stood at $67.3 million in August 2020.

As a result, TD Ameritrade overtook the largest US electronic brokerage firm, as measured by DARTs, as the US third-largest holder of retail FX funds. This is something that happens a number of times as both companies duke it out for dominance.

Meanwhile in August, GAIN Capital saw a fall of nearly $2.7 million to $210 million. Retail funds at OANDA Corporation also plummeted 2 percent, or $4.8 million.

The chart listed below outlines the full list of all FCMs that held Retail Forex Obligations in the month ending August 31, 2020. For purposes of comparison, the figures have been included against their July 2020 counterparts to illustrate the disparities.