Saxo Bank Sees Summer Slump in Trading Volumes as Volatility Tapers Off

Trading appears to be returning to more 'normal' levels after several months of high volatility

Saxo Bank, a major player in the online trading space, released its trading volumes for July of 2018 this Monday. The broker saw a fairly steep month-on-month decline in its foreign exchange (FX) trading volumes last month.

This was likely a result of the decrease in volatility across markets. The first quarter of this year saw a significant increase in volatility, driving up trading volumes. That volatility has tapered off as the year has progressed and firms are now returning to more ‘regular’ trading volumes.

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Saxo Bank’s performance in July was indicative of this state of affairs. The firm’s FX trading volumes decreased from $279.9 billion in June to $226.2 billion in July. This represented an almost 20 percent month-on-month decline in FX trading.

As is to be expected, average daily trading volumes in the FX markets declined as well. Over the course of July, Saxo Bank’s clients traded an average of $10.3 billion a day. This was the lowest daily average trading volume of the year thus far.

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Fixed income saw a more precipitous month-on-month decline as total trading volumes hit a year-low of $3.8 billion. This was an approximately 87 percent decline from the prior month.

Commodities up

The firm fared slightly better in its other markets. Equities trading declined by a comparatively small 10.7 percent compared to June, with Saxo Bank’s clients trading a total of $59.9 billion in equities over the course of July.

In commodities, the firm reported an identical, month-on-month daily average trading volume of $1.2 billion. In total, however, the volume of commodities traded actually increased by $400 million to $26.3 billion.

It should, of course, be reiterated that, despite the trading slumps, Saxo Bank did not perform poorly in July. A summer decline in trading combined with the tapering off of high volatility means the firm’s results for last month should be seen more as business as usual than a worrying decline in client activity.

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