US FCM Data May 2012 Mixed Figures

US regulated broker dealers have provided crucial data relating to net capital and net deposits for the month of May. April 2012 was a disaster as volumes had steep drops due to Easter Holiday and overall negative market sentiment.

Overall FCM's have had an increase in Net Capital thus giving investors confidence in the firms ability to maintain capital adequacy. On the other hand total retail deposits have declined thus confirming the overall trend in a slowdown in volumes.

In relation to net deposits Penson have had a drop in over $9 million of funds, Gain Capital and FXCM suffering a decline of $4 million compared to previous month.

All attention is diverted to PFG, a large broker dealer who filed bankruptcy this week after a major accounting back hole was found.

The data would suggest the firm is financially healthy with net capital slightly increased over April and only a small decline in client deposits.

Post Lehman, OTC markets have faced much scrutiny and the new Dodd Frank rulings, change in US Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term laws and the need for greater transparency should have strengthened the US's position as a leading financial centre for OTC markets. However the break up of 'another' major broker dealer highlights the many risk factors still affecting the OTC market.

Investors will again ask the same question, where are my funds safe?

Data extracted from CFTC website. Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term Magnates carries out extensive research analsyis in FX brokers monthly trade volumes, these can be found exclusively in our quarterly reports.