Global currency markets suffered one of their largest setbacks on the back of the Swiss franc crisis. However, FXCM, a specialist financial services firm that provides access to margin derivatives, benefited from the heightened volatility despite facing difficulties.
The firm reported operating metrics for the month of January with trading activity in its retail division growing on a YoY and MoM basis. The figures were the second-highest in the listed firm’s history. On the other hand, the firm saw a drop in this institutional segment as sophisticated clients paused activity during the turbulent event.
Retail Trading Metrics
Retail customer trading volume(1)* of $450 billion in January 2015, 3% higher than December 2014 and 32% higher than January 2014.
Average retail customer trading volume(1)* per day of $21.4 billion in January 2015, 2% higher than December 2014 and 38% higher than January 2014.
An average of 662,080 retail client trades per day in January 2015, 11% higher than December 2014 and 61% higher than January 2014.
Tradeable accounts(2) of 223,079 as of January 2015, a decrease of 7,500, or 3% from December 31 2014, and an increase of 33,469 or 18% from January 2014.
Institutional Trading Metrics
Institutional customer trading volume(1) of $255 billion in January 2015, 21% lower than December 2014 and 39% higher than January 2014.
Average institutional trading volume(1) per day of $12.1 billion in January 2015, 21% lower than December 2014 and 44% higher than January 2014.
An average of 35,734 institutional client trades per day in January 2015, 19% lower than December 2014 and 6% lower than January 2014.
Several forex providers suffered during the SNB crisis leaving traders vulnerable after the market gapped and liquidity was scarce.
“While it was a challenging month for FXCM due to the unprecedented movement of the Swiss franc on January 15th and the resulting negative balances of a number of our clients, we were able to generate our second-best month ever on the retail side and FXCM is back in a solid competitive position with approximately $1 billion in client equity and over 223,000 accounts worldwide,” said Drew Niv, president and CEO of FXCM, in a statement.
“For the first week of February, we are now receiving net inflows of client funds.”
“Our institutional business was affected somewhat in the month by the events of the 15th as a number of our institutional customers’ prime brokers initially disconnected from FXCM. However, I am pleased to say that all but one of the numerous prime brokers used by our institutional clients are back with FXCM and we remain optimistic that this business is on course to return to the growth it was experiencing before the events of the 15th,” he added.
FXCM suffered a $225 million loss during the recent crisis and was supported by Leucadi through a $300 million loan.
(1) Volume that FXCM customers traded in period translated into US dollars.
(2) An account that has sufficient funds to place a trade in accordance with FXCM trading policies.
* Volume generated by retail clients with negative balances due to the SNB announcement on January 15th, 2015 is excluded from volume.