Starting today, Forex Magnates is starting to cover details about volumes on one of the biggest markets for foreign exchange binary options. Since the Japanese Financial Services Authority (JFSA) has made it mandatory for companies, starting from this month, that provide the trading tool in the country to publicize their key metrics, Forex Magnates will provide a monthly recap of the data, touching on key points.
During the month of May combined volumes at GMO Click Securities, Traders Securities, IG Securities, JFX, YJ FX, Hirose FX and FX Trade Financial have totaled $674.6 million. This is a substantial drop from April, when the number was 41.5% higher. The drop in volumes remains consistent with the trend in the Japanese Forex trading volumes during the month of May.
Binary Options Trading Volume ¥ bln, source JFSA
The breakdown by currency pairs traded reveals that the customers hailing from Japan widely prefer to trade Japanese yen crosses. With a wide variety of offerings, the USD/JPY cross takes 45% of the market. Following behind are the EUR/JPY and the GBP/JPY crosses with 18% and 17%. The most traded binary options Forex pair globally, the EUR/USD comes only forth in Japan with a market share totaling 16%.
Binary Options Trading Market Share by Currency Pair, source JFSA
The total number of trading accounts increased by 2,600 in May to 271,554. That said, according to the monthly data released by the Japanese Financial Services Authority, the number of active binary options trading accounts in Japan has averaged just above 12,000 since the start of the year.
A definitive proof that the number of accounts is pretty much useless as a valuable measure for ascertaining how many clients a brokerage can expect to retain. The average lifespan of a binary options customer lasts just a couple of months, and there is not much that can be done about it, since the average number of customer loss incurred totaled 69.4% during the month of May.
At the same time, average profit to loss ratio calculation totaled 98.4%, as presented by data by the JFSA. This indicates a fair game, as a 100% number would mean a 50:50 chance in winning a certain trade. While there is no similar statistics for the Forex market, good traders know that the market can only go two ways - binary options simplify the process and for some clients with poor Risk Management strategies, they may actually be more prudent to use than straight forward FX trading.
