A ninja always has to be aware of his surroundings, so I recently did some spying to check out how the forex broker scene has been doing. After a few minutes of stealth-work, I got my hands on a copy of the most recent financial report for U.S. retail foreign exchange dealers (RFEDs) registered with the Commodity Futures Trading Commission (CFTC).
Okay fine, all I did was visit the CFTC official website – one of my favorite sites! In any case, from my visit to the CFTC site, I learned that U.S.-regulated retail forex brokers saw an increase of about 2.86% in client assets held from February to March.
The details reveal that Oanda, the largest of all RFEDs, led the way with its 8.87% surge. This huge jump actually accounted for almost three-fourths of the total increase. Meanwhile, GFT, Advanced Markets, TradeStation, and XpressTrade were among the minority that recorded a decrease in retail forex obligations.
As I have mentioned in a previous blog post, retail forex trading volumes in March were unusually low as currency intervention threats and the euro zone debt crisis caused investors to take a step back in their trading. Client assets could’ve piled up because fewer market players were trading (and therefore NOT losing money).
On a more positive outlook, the rise in client assets could be an indication that the industry is still expanding. This is a comforting thought considering that many have been saying that the increased regulation from the CFTC and the NFA has been threatening to choke off growth in the retail forex industry.