Diversified FX Spot Trading Boosts CLS’s September Volumes

Earlier in the month it was reported that CLS Bank reached a record high in FX trades sent for Settlement Settlement Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Read this Term in its network during September. Over the period, average daily trades were 1,419,102, with a value of $5.94 trillion. The figures were 37.0% and 21.2% respectively higher than August 2014.

Following its initial report, CLS has currently issued its more in-depth review of September’s volumes in its Monthly Market Report. The report uses the Bank of International Settlements accounting. The result is that trades that are double reported due to both sides of a trade sending transaction details to the CLS for reporting, are only counted once. As such, totals from the Monthly Market Report vary from the CLS’s initial volume release.

According to the CLS Market report, FX spot trading was the leading product type during September with average daily volumes (ADV) of $1.03 trillion, a 34.8% increase from August. During the same period, volumes of FX Swaps Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Read this Term and Forwards grew by 24.4% and 24.0% respectively to $917 billion and $274 billion. At the same time, average daily trades sent for settlement of FX spot trading grew 44.4% to 635,115. The average FX spot trade size during the month was $1,621,753 versus $1,736,510. The decrease can be attributed to more short-term speculative trades having taken place during the active period.

What was notable about the current spike in trading, were volume increases that took place across the spectrum of currencies. As seen the graph from CLS below, all major currencies saw a substantial increase in activity during September. While trading volume increases typically do affect all FX products positively, currency specific news does often create scenarios of individual currencies greatly outperforming or underperforming the overall market.