Institutional FX Trading Falls Double Digits in July – SEF Tracker Shows

FIA, a global trade organization for the futures, options and centrally cleared derivatives, has released its latest swap execution facility (SEF) tracker for July 2016, which showed a decrease in FX trading MoM relative to June 2016, as well as a slight shakeup in distribution.

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In terms of rates during July 2016, total trading averaged $354.5 billion per day, which was down -29.7% from June 2016, though actually higher YoY by a margin of 4.3% from July 2015.

FX Trading Volume Retreats

Looking at foreign exchange (FX) however, the total trading in July 2016 came in at $32.7 billion per day, reflective of a decrease of -13.9% from June 2016, and virtually unchanged YoY from June 2015. Moreover, average daily trading in non-deliverable forwards (NDFs) was $19.7 billion per day, falling by a factor of -11.0% from June 2016, and -3.9% YoY from a July 2015.

The main culprit for a decrease of trading volume in July 2016 can be attributed to a waning of 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 following the Brexit Brexit Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis Read this Term referendum that gripped financial markets in June 2016. Since then, most exchanges have experienced lower volumes and statistics given seasonal slowdowns in trading.

Options trading was also down during July 2016, yielding an average volume of $12.5 billion per day, which was good for a decline of -18.7% from June 2016, and -5.8% YoY from July 2015.

The overall market share for the FX market was also somewhat different in July 2016 relative to the month prior. In June 2016, BGC led the way with 28.1% (vs. 28.5% in June 2016), followed by ICAP with 21.8% (vs. 21.9% in June 2016), Tullett Prebon with 16.8% (15.6% in June 2016), GFI with 15.3% (vs. 15.3% in June 2016), Tradition with 13.3% (vs. 14.3% in Jun 2016), and others with 4.7% (vs. 4.4% in June 2016).