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FXCM July report reflects difficult market conditions

FXCM, one of the leading US forex brokers, reveals decrease in retail customer trading volume but record high institutional customer trading volume for Q2 2014. These results reflect the tough forex market conditions which drive retail customers away.
 
Most important operating metrics for the second quarter show revenues of $97.9 million, down 30% versus the same period in 2013. A strong growth in client equity of $1.31 billion, up 10% year-to-date and up 5% from March 31, 2014 is also reported. Other highlights include:
 
- Retail customer trading volume of $263 billion in July 2014, 4% higher than June 2014 and 32% lower than July 2013. 
- Average retail customer trading volume per day of $11.4 billion in July 2014, 6% lower than June 2014 and 33% lower than July 2013. 
- An average of 345,589 retail client trades per day in July 2014, 1% lower than June 2014 and 24% lower than July 2013. 
- Tradeable accounts of 201,794 as of July 30, 2014, a decrease of 6,571, or 3%, from June 2014, and an increase of 7,275, or 4%, from July 2013.
 
Institutional trading, however, show positive results with a July volume of $262 billion, 42% higher than July 2013 and a record for FXCM. An average of 45,223 institutional client trades per day in July 2014, 17% lower than June 2014 and 2% higher than July 2013. FXCM is therefore regarded as a trusted partner by many smaller brokers.
 
The weak results in retail customer trading are attributed to the current market conditions. Mr Drew Niv, Chief Executive Officer of FXCM said: "In the second quarter of 2014, volatility in the currency markets hit all-time lows with FXCM seeing retail customer volumes the lowest they have been in years."
 
With many claiming than the world forex market is shrinking lately the FXCM's figures are not unexpected. FXCM also reports increase in their CFDs business now constituting 26% of the company's volume for the 2nd quarter, a 5% increase to the prior quarter. It may be that FXCM feels that CFDs are more profitable than forex and shifts its focus accordingly.
 
The full FXCM report is here
 
TAGS: FXCM  Q2 2014  retail  institutional  operating metrics 

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