US FX Brokers Feel the Summer Heat as Retail Assets Decline 1.4% MoM
- The gradual diminish of the US retail FX market is coming close to reality as brokers are experiencing declining metrics. Retail Forex assets held by brokers declined 1.4% from a month earlier in June 2013.
US financial services firms operating as FCMs or RFEDs have reported financials for the month of June to the CFTC. The current figures reinforce a disappointing notion of declining clients assets in the worlds largest economy. Overall, firms reported a reduction in total clients assets held, for June firms held $635.54 million, a drop of 1.4% from $644.59 held in May.
Of the 12 reporting brokers, 6 reported a decline in client assets with the biggest downfall seen at Interactive Brokers and Knight Capital Americas. With the former experiencing a 13% decline and the latter a 7.4%. On the plus side IBFX (Monex) and FXCM both saw assets increase by approximately $2 million.
Unlike previous months, the US market was free from brokers departing or arriving. However, with Dodd Frank reforms implemented the US markets attraction is quickly fading away with other brokers expected to call it a day. On the other hand, a recent trend in the market is the global expansion of Japanese brokers. At the moment Japan brokers have preferred Australia or the UK to set up, however with capital requirement not being an issue for the giants, US could be a destination, especially for firms looking to capture the virgin LATAM region.
Although the fall in client assets is a concern for the industry at large, trading volumes in June were vibrant. This indicates that trader behaviour could be gearing towards higher Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term and an increase in the frequency of trading. The Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term in the markets have been a driving force behind the increasing volumes and short-term traders may be taking advantage of the current erratic trading environment.
US financial services firms operating as FCMs or RFEDs have reported financials for the month of June to the CFTC. The current figures reinforce a disappointing notion of declining clients assets in the worlds largest economy. Overall, firms reported a reduction in total clients assets held, for June firms held $635.54 million, a drop of 1.4% from $644.59 held in May.
Of the 12 reporting brokers, 6 reported a decline in client assets with the biggest downfall seen at Interactive Brokers and Knight Capital Americas. With the former experiencing a 13% decline and the latter a 7.4%. On the plus side IBFX (Monex) and FXCM both saw assets increase by approximately $2 million.
Unlike previous months, the US market was free from brokers departing or arriving. However, with Dodd Frank reforms implemented the US markets attraction is quickly fading away with other brokers expected to call it a day. On the other hand, a recent trend in the market is the global expansion of Japanese brokers. At the moment Japan brokers have preferred Australia or the UK to set up, however with capital requirement not being an issue for the giants, US could be a destination, especially for firms looking to capture the virgin LATAM region.
Although the fall in client assets is a concern for the industry at large, trading volumes in June were vibrant. This indicates that trader behaviour could be gearing towards higher Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term and an increase in the frequency of trading. The Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term in the markets have been a driving force behind the increasing volumes and short-term traders may be taking advantage of the current erratic trading environment.