CLS Group Ends September with over $2 Trillion in FX ADV

CLS Group, a major forex market settlement Settlement Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Read this Term provider, released its monthly trading metrics for September, reporting almost $2.04 trillion in the average daily traded volume. The figure is higher by more than 15 percent month-over-month and 11.5 percent on a yearly basis.

September was the second month when the ADV on CLS surpassed the $2 trillion mark. The milestone was first breached last March with a total monthly ADV of $2.12 trillion, making the last one the second-best month for the platform. The overall ADV figure has dropped since March to follow the industry trend.

CLS categorizes its forex market offerings into three primary instruments: forward, swap and spot. Demand for all three offerings jumped in September.

FX swaps Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Read this Term, which are the most traded instruments in terms of absolute trading volume, generated an ADV of $1.36 trillion for the period. It jumped from the previous month’s $1.23 trillion and $1.28 trillion in a similar month of the prior year.

The ADV of forex spot instruments came in at $541 billion, compared to $429 billion and $436 billion in August 2022 and September 2021, respectively. Demand for FX forwards also skyrocketed with an ADV of $138 billion, increasing almost 17 percent and 21 percent on a monthly and yearly basis, respectively.

Increasing FX Demand

CLS is a major infrastructure provider in the forex market, offering a wide range of services like settlement, clearing, processing and market data. CLSNet, which is the company’s bilateral payment netting calculation service for buy-side and sell-side institutions, reported a record $100 billion in the average daily notional of net calculations in August.

Meanwhile, other institutional forex platforms and market infrastructure providers reported a significant jump in September demand. FXSpotStream, a multi-bank foreign exchange aggregation service provider in the forex market, witnessed a 15 percent increase in September’s total volume to $1.6 trillion.