US Retail FX Deposits Climb in October as IB Doubles Stake

The total assets belong to the U.S. retail forex traders climbed by nearly 10 percent in October.

The Commodity Futures Trading Commission (CFTC) has published its anticipated monthly report for October 2018, which covers data for FCMs that are registered as Retail Foreign Exchange Dealers (RFEDs) and those included as broker-dealers that hold retail forex obligations in the United States.

The total assets belong to the U.S. retail forex traders climbed by nearly 10 percent in October as Interactive Brokers managed to double its clients’ assets the previous month. This is compared to its overall static performance seen throughout 2018.

Excluding IB’ surprise, and with only two reported months remaining in the year, the sector is tracking for a stable finish to the year. Yet, forex products are still a tough sell in the United States, despite the obvious benefits that a highly regulated environment can offer to traders.

The prospect of lighter regulations, however, may soon revive interest in the US market among foreign brokers, or at least help brighten the outlook for a retail industry that has struggled for quite some time under the provisions of the Dodd-Frank legislation.

Specifically, the FX funds held at registered brokerages operating in the United States came in at $579 million in October 2018, which is $48.5 million, or 9 percent, more than the ‎$530 million reported in September.

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Interactive Brokers Take Over TD Ameritrade

According to the CFTC dataset, three of the four FX firms listed notched increases in Retail Forex Obligations including GAIN Capital, Interactive Brokers, and OANDA Corporation. The best performer for the month was Interactive Brokers which saw an overall rise of $40.7 million to $73.6 million at the end of October 2018, compared to $32.8 million at the end of September, or an increase by 124 percent month-over-month.

Data from the US securities regulator showed that Nebraska-based TD Ameritrade lost nearly $610,000 in retail forex deposits.

Looking at the market share of different brokers, the overall distribution saw some changes in October relative to the month prior. GAIN Capital lost 3 percent but remained the leader in terms of market share, commanding a 43.0 percent share. OANDA also retained its stance as the second largest in the US with 33.0 percent market share – TD Ameritrade and Interactive Brokers reported an 11.0 and 13.0 percent share respectively.

The chart listed below outlines the full list of all FCMs that held Retail Forex Obligations in the month ending on October 31, 2018 – for purposes of comparison, the figures have been included against their September 2018 counterparts to illustrate disparities.

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