Trading Activity in FXCM and IG Group Continue to Fall

FXCM December 2012 Stats

From the table, we can clearly see that forex trading volume for both retail and institutional clients slipped in December. Compared to the November, retail trading volume declined by around 16% while institutional trading volume fell 11%. Year-on-year, retail and institutional trading volume dropped 11% and 23%, respectively.

Data on retail and institutional average trading volume per day were mixed. For retail, it decreased month-on-month but increased year-on-year. For institutional accounts, average trading volume fell both month-on-month and year-on-year.

IG Group, another major online broker, also reported a drop in trading revenue across all regions. Take a look at the table below:

IG Stats

Woah, that’s a lot of red marks! Not a single region reported an increase in first-half revenue as global forex trading revenue slipped by 14% compared to the same period the previous year. The number of active clients also dropped, with a 29% decrease in Japan and a 14% decline in the U.K.

IG Group CEO Tim Howkins remarked that the main reasons for the decline in revenue and overall market activity were central bank intervention, economic uncertainty, and weak consumer confidence. However, he also mentioned that these market factors are only temporary as he expects higher volatility to stimulate trading volume and revenue later on.

What’s next for the forex market? Is it losing its attractiveness? Let the ninja know what you think.