Knight Capital Group Reports Q4 Earnings & Hotspot FX Volumes

For the first time in a while Knight Capital Group is in the news for something other than their pending merger with fellow equity market maker Getco. The firm today announced its Q4 2012 earnings report and December trading volume.

For the quarter, Knight earned $6.5 million ($0.01/share) on $288 million revenue. Total average daily volume (ADV) in its Hotspot FX unit was $19.6 billion, a 9.3% decline from November 2012 and a 2.2% increase from December 2011. The drop in month over month figures follows similar results from other reporting OTC FX venues such as EBS and Thomson Reuters.

Volume Snapshot

In December 2012, Hotspot FX posted an Average Daily Volume (ADV) of $19.6 billion with a total of $392.5 billion transacted on the platform. On a quarterly and full year basis, Hotspot volumes also declined, in line or better than industry trends. Among publicly reported spot FX volumes (Hotspot FX, ICAP/EBS, Reuters), Hotspot FX accounted for 9.2% of the market in December 2012, 9.4% in Q4 2012, and 9.6% for full year 2012. Comparable with: 8.4% Dec 2011, 8.9% Q4 2011, and 8.7% full year 2011.

December 2012 Statistics (Single Count, USD):

• Hotspot FX posted an ADV of $19.6 billion. (based on 20 trading days)
• ADV decreased 9.3% versus November 2012. (November 2012 ADV: $21.6 billion)
• ADV decreased 2.2% versus December 2011. (November 2011 ADV: $19.2 billion)
• Total Volume: $392.5 billion.

Q4 2012 Statistics (Single Count, USD):

• Hotspot FX posted an ADV of $21.4 billion. (based on 65 trading days)
• ADV decreased 11.3% versus Q3 2012. (Q3 2012 ADV: $24.1 billion)
• ADV decreased 20.6% versus Q4 2011. (Q4 2011 ADV: $27.0 billion)
• Total Volume: $1,3941 billion.

Full Year 2012 Statistics (Single Count, USD):

• Hotspot FX posted an ADV of $25.4 billion. (based on 260 trading days)
• ADV decreased 14.2% versus Full Year 2011. (FY 2011 ADV: $29.6 billion)
• Total Volume: $6,600 billion.

Monthly Statistics:

USD Dollar Value Traded Average Daily Volume (ADV)

December 2012 $392.2 Billion $19.6 Billion

December 2011 $422.6 Billion $19.2 Billion

Volume Breakdown

In December 2012, both the Asian and European sessions declined in in market share by 1.49% and 4.80% respectively. The Americas session increased by 6.3%.

Volume percentages by time zone were:

Asia Europe Americas

Volume Percentage Dec 2012) 14.13% 42.1% 43.77%

Volume Percentage (Nov 2012) 15.62% 46.90% 37.47%

The Top Five currency pairs by volume percentage were as follows:

• EURUSD 33.76%
• USDJPY 16.77%
• AUDUSD 10.63%
• GBPUSD 9.80%
• USDCAD 6.24%

In December 2012, the ranking of the Top 10 pairs remained unchanged, with the majority having modest volume fluctuations. The exception being USD/JPY which continued its strong uptick in volume and gained 3.28%; achieved its highest volume on record. The remaining pairs in the Top 20 experiences slight shuffles in ranks. Most notable, USD/SEK rejoined the listing as the 20th most active and EUR/DKK was removed.