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

Forex
Broker Country Regulation Platform Min Deposit Review
Cyprus, UK, Mauritius CySec, FCA, FSC MT4, MT5, Web $10 Review Website
Cyprus, SVG CySEC MT5, Web,
cTrader
$100 Review Website
Australia, Cyprus ASIC, CySEC MT4, MT5, Iress $100 Review Website
Cyprus, Australia CySec, ASIC MT4, MT5 $5 Review Website
UK, Australia, South Africa FCA, ASIC, FSCA 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
UK FCA MT5 $5 Review Website
UK FCA MT4, Web, MT4
for Mac
$100 Review Website

More Forex Brokers News

FC Barcelona and FBS Sign New Global Partnership Agreement

Jan 17 2020 13:05:55

Broker specializing in online trading becomes club’s Official Trading Partner for four years, through 30 June 2024. Read more

FP Markets adds Autochartist to its list of analytical tools

Jan 13 2020 17:56:25

FP Markets, one of the leading brokers in Australia and a trusted global Forex and CFD broker, has added yet another instrument to its long list of trading tools  - the Autochartist - an online technical analysis tool which scans the market to provide detailed breakdowns across a wide range of ... Read more

FBS clients grow to over 14 million in 2019

Jan 07 2020 18:15:13

FBS, one of the leading players in the forex industry, published its annual report for 2019, celebrating its 10th birthday and 14 millionth client in some 190 countries around the globe. Read more

#FBS2020: FBS Gives Away Lucky Gift Boxes In A New Year Promo

Dec 09 2019 14:36:59

As many companies out there, FBS broker finishes off its year with a New Year promotion for its clients. At the end of 2019, they are offered to create a fancy Thank You e-card for their loved ones and get a gift box full of nice surprises. Read more

Trip For Pip: FBS To Launch A Quest Game For A Trip To London, Tokyo, Or Dubai

Oct 29 2019 14:09:54

FBS broker starts its new marketing campaign, and it has already attracted many eyeballs on social media. The promotion is called “Trip for Pip,” and it is very engaging for several reasons:    a) it’s playable;  b) it features a dream trip for two as the main prize. Read more

HYCM tops the list of brokers with highest percentage of winning clients

Oct 23 2019 12:12:59

The importance of choosing a reliable broker is paramount to trading. Most traders have given a serious thought to the security of their investments and these concerns are increasingly common in this highly competitive market. Read more

FXCM expands its crypto offering with CryptoMajor baskets

Oct 14 2019 14:49:01

  Major forex broker FXCM Group enhances its CFD offering with the launch of CryptoMajor- cryptocurrency baskets, which will allow its clients to trade in to multiple digital assets in one go. Read more

FXTM Launches 30% Welcome Bonus

Aug 06 2019 13:38:53

  As part of FXTM’s mission to provide clients with an exceptional trading experience, the international broker has launched its latest offering – the 30% Welcome Bonus!   This promotion, available under Exinity Limited, boosts your account by an extra 30% when you deposit $100... Read more

XM parent actively prepares for the launch of its US brand Trading.com

Jul 03 2019 14:19:28

  Trading Point Group, the owner and operator of the XM brand, actively prepares for the future launch of its US brand Trading.com. Read more

FBS Invites 20 Best Partners To a VIP Party

Jul 02 2019 15:04:24

Partner parties is a great way to get to know company’s local promoters and celebrate loyalty, motivation, and cooperation. In 2019, FBS broker launches the FBS Stars contest with a round trip flight to Russia’s second largest city and a VIP party invitation as a prize. Read more

de | cn | ru