CBOE Hotspot and FXSpotStream Dominate Growth Amongst eFX Trading Venues
- Electronic trading via ECNs spiked higher in the first quarter of 2018 after months of stagnation

The first quarter of 2018 is behind us and it's time to draw the line for one segment of the foreign exchange industry. In this article, we will briefly discuss the performance of the major ECN venues and the shifts in growth trends throughout the first three months of the new year.
There are notable changes in the growth of this industry since the beginning of the year that started in the later stages of 2017. The CBOE FX (formerly known as Hotspot) and FXSpotStream are dominating the market as trading volumes picked up massively.
Looking at all the major players in the industry that have reported their figures for the first quarter, year-on-year growth at FXSpotStream is the highest at 44 percent, followed by the CBOE FX at 42 percent. Trading at Euronext Fastmatch picked up by 14 percent, while GAIN Capital’s GTX unit reported a 12 percent rise.
Middle ground ECNs growing fastest
From the looks of it, size matters when it comes to growth numbers in the eFX ECN space as the two biggest players have gained the most. Notably, this data excludes EBS and Reuters, which have much higher volumes overall. In contrast to FXSpotStream and CBOE FX, whose size is hampering their growth.
The golden mid-market is providing the biggest opportunities for growth this year. The trend has shifted from last year when Fastmatch and GAIN Capital’s GTX were registering the largest gains year-on-year.
As FX volatility comes back the market is getting more saturated with larger players. They appear to have been sitting on the sidelines and awaiting the moment to come back into the market. Larger volumes have translated into bigger daily ranges across major currency pairs this quarter. All of the majors have registered a material pickup in activity.
Multi-year trend broken
The multi-year trend of a decline in FX volatility has finally been broken at the start of the new year. GAIN Capital’s CEO Glenn Stevens has been frequently pointing towards the metric during earnings calls and rightfully so. The tough days for the FX industry appear to finally be over (at least when it comes to the volatility side of things).
JPMorgan’s index measuring foreign exchange volatility has been trending lower for the past several years. The only interruptions have been associated with the so-called Black Swan Black Swan A Black Swan event is most commonly associated with an unforeseen calamity or event. In its most basic form, this event results in disastrous consequences for multiple parties, markets, or individuals and are characterized as extraordinarily rare in frequency, yet are seemingly predictable in retrospect. In the foreign exchange space, the most noteworthy of these events in recent memory was the Swiss National Bank (SNB) crisis which roiled currency markets back on January 15, 2015.During this instance, the SNB abruptly decided to abandon the Swiss franc (CHF) currency peg with the euro, convulsing markets. In particular, the aforementioned cap was designed to keep the franc pegged at 1.20 to the euro in a bid to shield exporters and mitigate deflationary pressure. With the removal of this peg, the rate plunged to 0.86 francs per euro, before ultimately recovering slightly.The resulting move led to total wash outs of positions and margin calls that stressed brokers and traders alike. The aftermath led to an ongoing debate over negative balance protection and other lingering effects on the FX industry and has remained controversial ever since.Other Black Swan EventsIn addition to the SNB, other examples of Black Swan events include the US housing market crash in the aftermath of the 2008 financial crisis, the hyperinflation of Zimbabwe in which inflation rates peaked at 79.6 billion percent and the dot-com bubble of 2001.More recently, many experts have posited whether the outbreak of Covid-19 can be characterized as a Black Swan event, given its seismic influence on equity markets in March 2020. Ultimately, there is no uniform consensus on the pandemic being a Black Swan event given the crisis is still ongoing. A Black Swan event is most commonly associated with an unforeseen calamity or event. In its most basic form, this event results in disastrous consequences for multiple parties, markets, or individuals and are characterized as extraordinarily rare in frequency, yet are seemingly predictable in retrospect. In the foreign exchange space, the most noteworthy of these events in recent memory was the Swiss National Bank (SNB) crisis which roiled currency markets back on January 15, 2015.During this instance, the SNB abruptly decided to abandon the Swiss franc (CHF) currency peg with the euro, convulsing markets. In particular, the aforementioned cap was designed to keep the franc pegged at 1.20 to the euro in a bid to shield exporters and mitigate deflationary pressure. With the removal of this peg, the rate plunged to 0.86 francs per euro, before ultimately recovering slightly.The resulting move led to total wash outs of positions and margin calls that stressed brokers and traders alike. The aftermath led to an ongoing debate over negative balance protection and other lingering effects on the FX industry and has remained controversial ever since.Other Black Swan EventsIn addition to the SNB, other examples of Black Swan events include the US housing market crash in the aftermath of the 2008 financial crisis, the hyperinflation of Zimbabwe in which inflation rates peaked at 79.6 billion percent and the dot-com bubble of 2001.More recently, many experts have posited whether the outbreak of Covid-19 can be characterized as a Black Swan event, given its seismic influence on equity markets in March 2020. Ultimately, there is no uniform consensus on the pandemic being a Black Swan event given the crisis is still ongoing. Read this Term events (i.e. SNB, Brexit Brexit Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades. The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minister Boris Johnson was elected Prime Minister the following month, who was well-known as a headstrong Brexit supporter. While the United Kingdom was predicted to leave exit the EU by October 31st, 2019, the U.K. Parliament sought out a deadline extension that delayed voting on the new deal. Following Boris Johnson’s reelection, Brexit occurred on January 31st, 2020 at 11 pm Greenwich Mean Time. Brexit Creating Ongoing Issues in with Europe While the United Kingdom is in a transition period following its departure from the EU, the U.K. is negotiating its complete trade relationship with the EU, which is the United Kingdom’s largest trade partner. Terms of this trade agreement must be met by January 1st, 2021. Should terms of this trade agreement take longer than the projected resolution date of January 1st, 2021 then the U.K. must acquire an extension no later than June 1st, 2020. Failure to do so will result in the U.K. is subject to tariff and host rule changes exercised by the E.U. This situation is referred to as the “no-deal” Brexit and should this occur the consequences could result in a significant fallout of the U.K. economy. For the past few years, many banks and lenders operating previously in the UK had been given passporting rights to the European continent. The lingering uncertainty caused by Brexit resulted in many of these lenders relocating their European headquarters within continental Europe. Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades. The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minister Boris Johnson was elected Prime Minister the following month, who was well-known as a headstrong Brexit supporter. While the United Kingdom was predicted to leave exit the EU by October 31st, 2019, the U.K. Parliament sought out a deadline extension that delayed voting on the new deal. Following Boris Johnson’s reelection, Brexit occurred on January 31st, 2020 at 11 pm Greenwich Mean Time. Brexit Creating Ongoing Issues in with Europe While the United Kingdom is in a transition period following its departure from the EU, the U.K. is negotiating its complete trade relationship with the EU, which is the United Kingdom’s largest trade partner. Terms of this trade agreement must be met by January 1st, 2021. Should terms of this trade agreement take longer than the projected resolution date of January 1st, 2021 then the U.K. must acquire an extension no later than June 1st, 2020. Failure to do so will result in the U.K. is subject to tariff and host rule changes exercised by the E.U. This situation is referred to as the “no-deal” Brexit and should this occur the consequences could result in a significant fallout of the U.K. economy. For the past few years, many banks and lenders operating previously in the UK had been given passporting rights to the European continent. The lingering uncertainty caused by Brexit resulted in many of these lenders relocating their European headquarters within continental Europe. Read this Term, US, and less so the French elections, etc.).
With the massive pickup in volumes observed since the start of the year, we can conclude that the worst of the no-volatility days are most likely behind us (at least when it comes to this cycle).
The first quarter of 2018 is behind us and it's time to draw the line for one segment of the foreign exchange industry. In this article, we will briefly discuss the performance of the major ECN venues and the shifts in growth trends throughout the first three months of the new year.
There are notable changes in the growth of this industry since the beginning of the year that started in the later stages of 2017. The CBOE FX (formerly known as Hotspot) and FXSpotStream are dominating the market as trading volumes picked up massively.
Looking at all the major players in the industry that have reported their figures for the first quarter, year-on-year growth at FXSpotStream is the highest at 44 percent, followed by the CBOE FX at 42 percent. Trading at Euronext Fastmatch picked up by 14 percent, while GAIN Capital’s GTX unit reported a 12 percent rise.
Middle ground ECNs growing fastest
From the looks of it, size matters when it comes to growth numbers in the eFX ECN space as the two biggest players have gained the most. Notably, this data excludes EBS and Reuters, which have much higher volumes overall. In contrast to FXSpotStream and CBOE FX, whose size is hampering their growth.
The golden mid-market is providing the biggest opportunities for growth this year. The trend has shifted from last year when Fastmatch and GAIN Capital’s GTX were registering the largest gains year-on-year.
As FX volatility comes back the market is getting more saturated with larger players. They appear to have been sitting on the sidelines and awaiting the moment to come back into the market. Larger volumes have translated into bigger daily ranges across major currency pairs this quarter. All of the majors have registered a material pickup in activity.
Multi-year trend broken
The multi-year trend of a decline in FX volatility has finally been broken at the start of the new year. GAIN Capital’s CEO Glenn Stevens has been frequently pointing towards the metric during earnings calls and rightfully so. The tough days for the FX industry appear to finally be over (at least when it comes to the volatility side of things).
JPMorgan’s index measuring foreign exchange volatility has been trending lower for the past several years. The only interruptions have been associated with the so-called Black Swan Black Swan A Black Swan event is most commonly associated with an unforeseen calamity or event. In its most basic form, this event results in disastrous consequences for multiple parties, markets, or individuals and are characterized as extraordinarily rare in frequency, yet are seemingly predictable in retrospect. In the foreign exchange space, the most noteworthy of these events in recent memory was the Swiss National Bank (SNB) crisis which roiled currency markets back on January 15, 2015.During this instance, the SNB abruptly decided to abandon the Swiss franc (CHF) currency peg with the euro, convulsing markets. In particular, the aforementioned cap was designed to keep the franc pegged at 1.20 to the euro in a bid to shield exporters and mitigate deflationary pressure. With the removal of this peg, the rate plunged to 0.86 francs per euro, before ultimately recovering slightly.The resulting move led to total wash outs of positions and margin calls that stressed brokers and traders alike. The aftermath led to an ongoing debate over negative balance protection and other lingering effects on the FX industry and has remained controversial ever since.Other Black Swan EventsIn addition to the SNB, other examples of Black Swan events include the US housing market crash in the aftermath of the 2008 financial crisis, the hyperinflation of Zimbabwe in which inflation rates peaked at 79.6 billion percent and the dot-com bubble of 2001.More recently, many experts have posited whether the outbreak of Covid-19 can be characterized as a Black Swan event, given its seismic influence on equity markets in March 2020. Ultimately, there is no uniform consensus on the pandemic being a Black Swan event given the crisis is still ongoing. A Black Swan event is most commonly associated with an unforeseen calamity or event. In its most basic form, this event results in disastrous consequences for multiple parties, markets, or individuals and are characterized as extraordinarily rare in frequency, yet are seemingly predictable in retrospect. In the foreign exchange space, the most noteworthy of these events in recent memory was the Swiss National Bank (SNB) crisis which roiled currency markets back on January 15, 2015.During this instance, the SNB abruptly decided to abandon the Swiss franc (CHF) currency peg with the euro, convulsing markets. In particular, the aforementioned cap was designed to keep the franc pegged at 1.20 to the euro in a bid to shield exporters and mitigate deflationary pressure. With the removal of this peg, the rate plunged to 0.86 francs per euro, before ultimately recovering slightly.The resulting move led to total wash outs of positions and margin calls that stressed brokers and traders alike. The aftermath led to an ongoing debate over negative balance protection and other lingering effects on the FX industry and has remained controversial ever since.Other Black Swan EventsIn addition to the SNB, other examples of Black Swan events include the US housing market crash in the aftermath of the 2008 financial crisis, the hyperinflation of Zimbabwe in which inflation rates peaked at 79.6 billion percent and the dot-com bubble of 2001.More recently, many experts have posited whether the outbreak of Covid-19 can be characterized as a Black Swan event, given its seismic influence on equity markets in March 2020. Ultimately, there is no uniform consensus on the pandemic being a Black Swan event given the crisis is still ongoing. Read this Term events (i.e. SNB, Brexit Brexit Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades. The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minister Boris Johnson was elected Prime Minister the following month, who was well-known as a headstrong Brexit supporter. While the United Kingdom was predicted to leave exit the EU by October 31st, 2019, the U.K. Parliament sought out a deadline extension that delayed voting on the new deal. Following Boris Johnson’s reelection, Brexit occurred on January 31st, 2020 at 11 pm Greenwich Mean Time. Brexit Creating Ongoing Issues in with Europe While the United Kingdom is in a transition period following its departure from the EU, the U.K. is negotiating its complete trade relationship with the EU, which is the United Kingdom’s largest trade partner. Terms of this trade agreement must be met by January 1st, 2021. Should terms of this trade agreement take longer than the projected resolution date of January 1st, 2021 then the U.K. must acquire an extension no later than June 1st, 2020. Failure to do so will result in the U.K. is subject to tariff and host rule changes exercised by the E.U. This situation is referred to as the “no-deal” Brexit and should this occur the consequences could result in a significant fallout of the U.K. economy. For the past few years, many banks and lenders operating previously in the UK had been given passporting rights to the European continent. The lingering uncertainty caused by Brexit resulted in many of these lenders relocating their European headquarters within continental Europe. Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades. The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minister Boris Johnson was elected Prime Minister the following month, who was well-known as a headstrong Brexit supporter. While the United Kingdom was predicted to leave exit the EU by October 31st, 2019, the U.K. Parliament sought out a deadline extension that delayed voting on the new deal. Following Boris Johnson’s reelection, Brexit occurred on January 31st, 2020 at 11 pm Greenwich Mean Time. Brexit Creating Ongoing Issues in with Europe While the United Kingdom is in a transition period following its departure from the EU, the U.K. is negotiating its complete trade relationship with the EU, which is the United Kingdom’s largest trade partner. Terms of this trade agreement must be met by January 1st, 2021. Should terms of this trade agreement take longer than the projected resolution date of January 1st, 2021 then the U.K. must acquire an extension no later than June 1st, 2020. Failure to do so will result in the U.K. is subject to tariff and host rule changes exercised by the E.U. This situation is referred to as the “no-deal” Brexit and should this occur the consequences could result in a significant fallout of the U.K. economy. For the past few years, many banks and lenders operating previously in the UK had been given passporting rights to the European continent. The lingering uncertainty caused by Brexit resulted in many of these lenders relocating their European headquarters within continental Europe. Read this Term, US, and less so the French elections, etc.).
With the massive pickup in volumes observed since the start of the year, we can conclude that the worst of the no-volatility days are most likely behind us (at least when it comes to this cycle).