Forex Industry Volumes Off to a Strong Start in 2015

If there’s any strong proof that forex traders do thrive in volatility, it’s the trading industry metrics for January. Instead of dampening trade activity, the SNB shocker around the middle of the month might’ve even boosted volumes!

Forex broker Saxo Bank reported a 12.5% increase in average daily volumes to $14.4 billion in January, chalking up its highest total monthly trading activity since October last year. U.S.-based forex firm Interactive Brokers saw a 15% monthly increase in its daily average revenue trades in January, 16% higher from a year ago.

These gains were not limited to U.S. forex companies, as Japanese broker GMO Click Securities reported a 13.9% month-over-month jump in forex trading volumes, surpassing the firm’s record highs last December.

forex client depositsIn addition, some brokers such as Saxo Bank enjoyed an increase in client deposit levels in the aftermath of the SNB announcement, as some forex traders transferred their accounts to better-capitalized firms. However, client collateral available was still on the lower end for some firms since they are still struggling to collect payments from clients with negative account balances.

Account profitability also took a hit during the month, with Interactive Brokers reporting a total of $120 million in total client losses for January. Other brokers have yet to release their January metrics but it seems safe to conclude that the SNB really did shake things up in the industry during the month.

Moving forward, several brokers have already announced changes in maximum leverage and margin requirements, which are likely to have an impact on trading activity in the coming months. Retail forex traders are also expected to exercise a bit more caution with their positions, fearing that another “black swan” event could rock the markets. Nonetheless, fresh market catalysts and clearer central bank biases could still set the stage for stronger forex trends and boost trading volumes.

How do you think forex industry metrics would fare in the coming months? Do share your opinions in our comments section! 

 

 

  • ForExchange

    Hi Forex Ninja,

    this is a very fascinating topic. I guess we will not get the answer but I would be interested to know what is going to happen with all those retail traders who lost their money. Are they going to quit or just make new deposits? Do such an SNB event have long-term influence on the market and credibility of brokers and central banks or are these effects only short-term?

    It is not easy to get an answer for these questions but it is something to think about.

    Have a nice week,

    FE

    • I’m also curious to find out whether this would discourage retail traders from opening new accounts or if it will barely affect deposits at all. I guess we’ll have to wait for the metrics in the next few months to find out. Thanks for checking out my blog and for sharing your thoughts as always! See you around!

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