Surprise! CME and ICE See Rise in December FX Trading Volume

Surprise, surprise! Who would’ve thought that we’d be treated to a couple of upbeat trading volume reports from the Chicago Mercantile Exchange (CME) and the Intercontinental Exchange (ICE) to start the year?

That’s right, folks! To usher in the new year, these two large exchanges published an unexpected rise in average daily volume. Have a look at the numbers below:

Table of Average Daily Voulme

The CME, or “the Merc,” as the more business savvy call it, is a financial and commodity derivative exchange based in Chicago, Illinois. It’s one of the largest in the world, as it trades all sorts of financial instruments – interest rates, stocks, commodities, derivatives, and of course, currencies!

In fact, the CME’s foreign exchange segment saw the biggest increase last month, as it rose 14.1% year-on-year to record a total of 826,000 contracts. Month on month, it managed to post a 6.6% gain from November’s trading activity, which clocked in at 775,000 contracts.

Meanwhile, the ICE also saw volumes rise last December.

For those who are unfamiliar with the ICE (also known as the Intercontinental Exchange), it is a financial services company from the United States whose business focuses on the operations component of Internet-based market places where futures and options contracts are traded. Recently, the ICE opened its doors to handling trades in soft commodities (such as sugar, coffee, and cotton), equity index futures, as well as our favorite, the forex market.

Apparently, forex activity rose 2.6% from December 2011 levels to hit 33,146 contracts this past month. Furthermore, this marked a 32% increase (Yowza!) from November 2012’s figures.

These results were somewhat surprising, as normally, we see volumes drop in December in light of the holiday season. Moreover, over the last few months, we’ve been seeing industry giants like FXCM and Gain Capital report falling volumes.

All in all, this raises a few questions about the state of the forex industry and trading volumes. What caused the rise in trading activity this past December? Is it something that will carry over into 2013? Was this an industry-wide increase in activity, or was it limited to just a handful of brokers?

With brokers scheduled to release their own metrics over the next few weeks, hopefully more light will be shed on this pressing issue and we’ll be able to get a firmer grasp of the state of the forex industry over the next few months.