Cboe Reports Decline in FX Volumes Again for August

Cboe FX Markets has published the trading volumetric figures for August, showing another month in slow down. The Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term handled total trades worth $602 billion last month, a month-on-month decline of 12.7 percent.

Furthermore, the daily average trading volume for the month dropped to $28.7 billion from $30 billion in July. It is to be noted that August had two trading sessions less than July.

The exchange’s volume continued to decline since the 9 percent decrease in July, compared to the previous month’s spike.

The Downtrend in FX Trading Volume

Cboe FX’s volume touched an all-time high in March with $1,209.6 billion, a 31.7 percent jump from the previous month’s volumes, which was the result of the high market demand induced by the COVID-19 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. However, since then, the volumes have dropped significantly, only with a spike of $761 billion in June.

Although, this trend was seen across the industry as almost all the trading venues were impacted by the increasing demand in the market and the correction.

Notably, the institutional trading volume on the US-based exchange held a steady increase from December last year until the drop from the spike in March. Though the market corrected itself drastically, a stable trend is yet to be seen.

August’s numbers are the lowest since that record in March, as the volume has dropped more than half of that amount.

Year-over-year, the institutional demand in August dropped by 13.3 percent as in August last year the exchange reported a total volume of $728 billion.

Interestingly, in the second quarter in 2020 ending in June, the exchange handled total trades worth $2.06 trillion, compared to $2.77 trillion in the first quarter, a major chunk of which was contributed by the volumes in March.