Last week, I reported that several brokers including FXCM, Saxo Bank, DMM Securities, and even Thomson Reuters were off to a slow start. Well, now you can add GAIN Capital to the list of slow starters!
First things first: who is GAIN?
GAIN Capital is a brokerage firm that provides retail market services in foreign exchange, contracts for differences, and exchange-based trading products. It was established back in 1999 in Bedminster, New Jersey, and it was one of the first brokers to ever offer online forex trading. In 2010, the company went public on the New York Stock Exchange.
Though GAIN Capital is based in the U.S., it serves clients in over 140 countries. In fact, it’s estimated that over 50% of its total revenues comes from outside the U.S.
It runs Forex.com, its largest retail forex website, and it also provides white label solutions for other forex trading companies that cater to a global audience.
GAIN Capital’s Declining Trading Volume
A few days ago, GAIN Capital published its trading volume figures for the month of July 2013. It showed a small but still notable decline in trading volume for both institutional and retail clients.
For institutional trading, the firm ended July with a 4.2% month-on-month decline. With regards to retail trading, GAIN reported a whopping 8.5% decrease. Still, year-on-year, both institutional and retail trading volume look strong. Institutional trading grew by a whopping 124.1% while retail trading soared by a respectable 49.2%.
Below are the complete metrics from GAIN Capital’s website:
• Retail OTC trading volume1 of $141.7 billion, a decrease of 8.5% from June 2013 and an increase of 49.2% from July 2012.
• Average daily retail OTC trading volume of $6.2 billion, a decrease of 20.4% from June 2013 and an increase of 44.7% from July 2012.
• Active retail OTC accounts2 of 64,793, an increase of 1.0% from June 2013 and an increase of 5.6% from July 2012.
• Futures Daily Average Revenue Trades3 (DARTs) of 12,266, a decrease of 19.1% from June 2013.
• Total funded accounts4 of 95,046, a decrease of 2.0% from June 2013 and an increase of 26.8% from July 2012.
• Total retail customer assets5 of $461.3 million, a decrease of 3.3% from June 2013 and an increase of 43.8% from July 2012.
• Total institutional trading volume6 of $352.0 billion, a decrease of 4.2% from June 2013 and an increase of 124.1% from July 2012.
• Average daily institutional volume of $15.3 billion, a decrease of 16.7% from June 2013 and an increase of 92.5% from July 2012.
It appears that several brokers are reporting weak trading volume metrics. Why do you think this is? Is this simply because of the summer months? Feel free to share your opinion on the matter by leaving a comment below.