de | cn | ru

Brokers News

GAIN Capital Targets 50% Revenues from Non-Retail Trading

Just a couple of days ago, US financial giant GAIN Capital, the group behind FX broker FOREX.com, announced a set of strong metrics for the third quarter of 2013. In the conference call  following the release of the results, GAIN's chief executive officer Glenn Stevens and chief financial officer Jason Emerson elaborated on the factors behind the successful performance, but also offered some insights into the group's future plans and strategic perspectives.

 

 

The Mixture and the Forecast

 

Perhaps you're aware that for several quarters in a row GAIN has been pursuing the three pillars approach: the diversification of business across retail, institutional and exchange-based trading. This approach was the main theme of what Stevens and Emerson said. More interestingly, GAIN's chief executive outlined a long-term goal for the contribution of each of these segments to the company's earnings. While commission-based business accounted for 21% of revenues in the third quarter, Stevens said that in the short term the group aims to raise this to 30% and even to 50% in the long term.

 

Let's explore the rationale for such a plan.

 

Retail Trading

 

Retail (over-the-counter) trading has formed the bulk of GAIN's business for many years: in 2011 FOREX.com accounted for 97% of all revenues. And there's nothing surprising about this fact: after all, as Glenn Stevens put it, retail trading continues to offer some good margins, growth, it has the potential to win more market share and let's not forget the embedded variability. Moreover, the retail market fueled the earnings of the company in the third quarter. 

 

The tight regulations in the United States play in favor of GAIN's growth in this industry, as many small players feel squashed by the rules. Stevens noted that many small retail Forex brokers would benefit from the shield that GAIN has to offer.

 

However, the issue at stake here is the sustainability of income from this segment – it is generating money for the broker in times of high volatility but the other two pillars were in fact added to the strategy because GAIN wanted to act against effects of lower FX volatility.

 

 

Institutional Trading

 

Since 2011, GAIN has made moves to propel its non-retail trading business and the efforts have been successful as in 2012 the clientele of GTX platform grew substantially. Volume at the latter rose more than twofold to $2 trillion and revenue nearly tripled to $12 million. 

 

The company has been keen to capitalize on the edge that institutional trading has: although it's harder to attract institutional traders, they also tend to form a dedicated customer base that sticks along with a given business. This is why GAIN is seeking a share of these sticky revenues and has made a vital step in this direction with the acquisition of GFT. The effects of the deal on revenues have yet to be felt as the data for the third quarter of 2013 concerned only four days of GFT's operations within GAIN. 

 

Given the successful completion of this deal, Stevens did not deny the possibility of future acquisitions in this segment.

 

 

Exchange-based Trading

 

Although GAIN's management is optimistic on the future of Forex business and expects improvement in trading conditions in general, the company keeps its options open and aims to diversify into non-FX trading too. For that matter, we should recall the acquisition of futures brokerage Open E Cry (OEC) in June 2012. Stevens was adamant that the company would continue to pursue opportunities in the areas concerning any interest rate driven products.

 

 

About GAIN Capital

 

GAIN Capital Holdings, Inc. (NYSE: GCAP) is a global provider of online trading services. GAIN's innovative trading technology provides market access and highly automated trade execution services across multiple asset classes to a diverse client base of retail and institutional investors.

 

GAIN's businesses include FOREX.com, which provides retail traders around the world access to a variety of global OTC financial markets, including forex, precious metals and CFDs on commodities and indices; GTX, a fully independent FX ECN for hedge funds and institutions; OEC, an innovative online futures broker; and GAIN Securities, Inc. (member FINRA/SIPC), a licensed U.S. broker-dealer.

 

GAIN Capital is headquartered in Bedminster, New Jersey, with a global presence across North America, Europe and the Asia Pacific regions.  For further company information, visit www.gaincapital.com.

TAGS: gain capital  gain capital ceo  glenn stevens  gain capital results  forex.com  retail forex  institutional trading  forex.com broker  commission-based business  revenues 

More news about Forex.com

Broker Country Regulation Platform Min Deposit Review
US CFTC, NFA MT4, Web,
in-house
$50 Review Website
US NFA, CFTC MT4 $250 Review Website
Cyprus, UK, Mauritius CySec, FCA, IFSC MT4, MT5, Web $10 Review Website
Cyprus, Australia CySec, ASIC MT4, Web,
Mobile app
$100 Review Website
Australia, Cyprus ASIC MT4, MT5,
IRESSTrader
$100 Review Website
UK, Cyprus, Australia FCA, CySec, ASIC MT4, MT5 $5 Review Website
UK, Australia FCA, ASIC MT4, Trading
Station,
NinjaTrader
$50 Review Website
UK, Cyprus, UAE, South Africa FCA, CySEC, DFSA, FSB MT4, MT5, FxPro
Markets,
cTrader
$100 Review Website
Cyprus CySEC MT4, MT5, Web $1 Review Website
Belize IFSC MT4, MT5 $100 Review Website
Cyprus, UK, South Africa, UAE CySec, FCA, FSCA, DFSA MT4, MT5, Web $5 Review Website
Cyprus, UK CySEC, FCA MT4, MT5 $1 Review Website
Australia ASIC MT4, MT5 $100 Review Website
UK FCA MT4, Web, MT4
for Mac
$100 Review Website
Australia, UK ASIC, FCA MT4, MT5,
cTrader
$200 Review Website

More Forex Brokers News

Vantage Prime will no longer service non-Australian clients

May 20 2019 13:36:39

  Vantage Prime, which is a part of the Vantage FX group, announced it will no longer service non-Australian clients, online media Finance Magnates reported today. The broker’s decision is taken due to regulatory concerns. Read more

Dukascopy warns it has no cooperation with shady broker GCG Asia

May 16 2019 13:29:47

  Swiss forex brokerage and bank Dukascopy has repeatedly warned investors that it is has no cooperation Guardian Capital Asia (GCG Asia) and that the latter is likely involved in a fraudulent scheme. Read more

$75 mln forex Ponzi scam revealed in the US

May 03 2019 16:46:08

The Commodity Futures Trading Commission (CFTC) in the US has filed charges against Florida based Oasis International Group, Oasis Management and Satellite Holdings along with their owners for running a 75 million USD Ponzi scheme, concealed as forex investment program. Read more

Australians lost $86 mln to investment scams in 2018

May 02 2019 17:04:18

Australians lost over 86 million USD to investment scams in 2018 alone – the biggest portion of the almost 490 million USD  in losses from over 378 000 scam reports, the latest report of the Australian Competition and Consumer Commission’s (ACCC) reveals. Read more

FXTM now offers a deposit bonus of up to $5 000

Apr 25 2019 11:10:24

  Global award-winning brokerage FXTM has launched their biggest deposit bonus promotion ever. The broker is now offering an extra 30% back from every amount their traders deposit over a period of 30 days, up to a total of $5,000. Read more

FXTM appoints Han Tan as a Market Analyst for Southeast Asia region

Apr 19 2019 13:28:36

  Global award-winning forex broker FXTM has just announced the appointment of Tan Chung Han (Han Tan) as a Market Analyst. Read more

FXTM gets a license from Mauritius’ FSC

Mar 28 2019 09:59:36

  Award-winning forex brokerage  FXTM (ForexTime) continues its ongoing global expansion. The broker announced it has acquired a license from the Financial Services Commission (FSC) of the Republic of Mauritius previous week. Read more

Fortrade is the first broker to get an ASIC license in nearly 2 years

Mar 20 2019 15:03:35

  Fortrade acquired a financial services license from the Australian Securities and Investments Commission (ASIC), which hasn’t been very welcoming of new retail forex broker applicants lately. Read more

FP Markets launches a suite of cutting-edge MT4 tools for traders

Mar 06 2019 14:31:42

  FP Markets, a market-leading Forex and CFD provider, launches MT4 Trader Toolbox, a suite of twelve online trading tools which will take their clients’ trading to the next level. Read more

Major broker IG launched its US website

Jan 31 2019 13:15:37

  Global brokerage IG launched its website intended for US retail clients (www.ig.com/us). Residents of the US (with the exception of those in Arizona or Ohio) can now register on the broker’s website in less than 5 minutes and start trading. Read more

de | cn | ru