GAIN Capital’s Retail FX Volumes Hit $784B in Jan-March Quarter

Publicly listed brokerage GAIN Capital Holdings, Inc. (NYSE: GCAP) said quarterly FX trading on their platform has soared more than 50 percent during the Coronavirus Coronavirus The outbreak of Covid-19 or Coronavirus in early 2020 has since redefined the financial services industry. Brokers have been forced to quickly adapt to several changes, both positive and negative.This includes the FX industry, which saw surges in volumes across the retail and institutional space in Q1 2020. This trend can be explained by an outflow of volatility, coupled with countries taking major moves to stabilize their respective economies.In conjunction with uncertainty caused by the virus, The outbreak of Covid-19 or Coronavirus in early 2020 has since redefined the financial services industry. Brokers have been forced to quickly adapt to several changes, both positive and negative.This includes the FX industry, which saw surges in volumes across the retail and institutional space in Q1 2020. This trend can be explained by an outflow of volatility, coupled with countries taking major moves to stabilize their respective economies.In conjunction with uncertainty caused by the virus, Read this Term concern-driven market swings.

As world markets take a turn for the worse, GAIN Capital’s retail clients transacted a total of $784 billion in Q1 2020, up 53 from $487 billion in Q1 2019. Further, the group’s average daily volumes (ADVs) came in at $11.7 billion in the three months through March, up 52 percent quarter-over- quarter from $7.7 billion per day in the prior year.

The bulk of advance in GAIN’s quarterly turnover could be easily attributed to solid volumes seen in March, nearly 50 percent of the Q1 totals. Out of this figure, the previous month showed $388.6 billion in monthly trading volume, up 95 percent month-over-month from $199 billion in February and more than double the daily average reported year-to-date.

Over a yearly timetable, GAIN’s latest retail OTC volume had run 130 percent above March 2019 averages of $169 billion. The ADV figure also hit a record $17.7 billion in March 2020, up 78 percent month-over-month from $9.9 billion per day in February 2020. This figure has more than doubled on a yearly basis from $8.0 billion the previous year.

Gain reports solid financials

Meanwhile, 3-month trailing active accounts in the OTC retail segment totaled 87,349 by the end of March, which was up 25 percent on a yearly basis from 70,051 accounts in Q1 2019.

"Client metrics were strong during the quarter, with a 57% year-on-year increase in clients who placed their first trade. Market conditions not only attracted new clients, but also engaged those who had previously opened accounts during 2019 but had not yet traded. That in turn helped improve our 3-month trailing active accounts by 25% compared to last year," stated Glenn Stevens, CEO of GAIN Capital.

Earlier today, GAIN reported its net revenues for Q1 2020 at $185.7 million, which was four times higher than the $38.4 million reported back in the Jan-March quarter of 2019. Over a quarterly basis, the company revenue rose 250 percent from $53.3 million in the fourth quarter of 2019.

Before the first quarter, FX retail platforms and elsewhere had suffered a prolonged period of low Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad Read this Term and lacklustre volumes, crimping profitability. In particular, GAIN’s net revenues for Q4 2019 came in ‎at $53.3 million. Furthermore, the year ending December 31, 2019, netted a ‎revenue drop of 35 percent year-over-year, having plunged to $234 million from $358.0 million reported ‎back in fiscal 2018.‎