A further decline in average daily volumes in November blights on-exchange FX trading at ICE

North American multinational network of exchanges and clearing houses Intercontinental Exchange, Inc. (NYSE: ICE) has today reported monthly exchange traded volumes across all asset classes for the month of November 2014.

Congruent with the industry direction, on-exchange volume figures have stabilized across all asset classes at ICE, however the decline from 50,000 FX contracts having been traded in September decreased to 44,000 in October, with November’s figure showing a further drop, albeit a very small one, to 42,000 contracts during the month.

Futures and options average daily volume (ADV) also declined by 16% compared with November last year, however Commodity ADV increased by a substantial 12% compared with October’s 1% increment, with energy ADV up 13% driven by Natural Gas, Brent, Other Oil and Gasoil ADV, up 19%, 10%, 19% and 4%, respectively, from the prior year period, an interesting dynamic at a time when firms are concentrating on developing asset classes other than FX, including commodities and stocks.

When reviewing the average daily volumes (ADV) for FX and on a monthly basis, however, the minor decrement in FX is still not of great concern as September’s volumes were double those achieved in August, as well as being 117% higher than October last year, the month which began the period of low volatility across many FX firms which lasted for almost a year, therefore despite a third month of decrements, November’s result is still far higher than in the final stages of the summer this year.

Interestingly, a other exchange-traded FX venues have emerged displaying similar patterns, whereby October’s results have been replicated in November, albeit with a minor downturn in some cases.

The disparity here is that whilst September heralded a vast upsurge in currency market volatility which spurred on a series of large volumes for many FX firms and executing venues, October outstripped September’s already stellar results in many cases. In the case of ICE, no such increment was made over September’s results during October when considering the average daily number of FX contracts traded, a direction which did not reverse itself in November.

With ICE’s third quarter 2014 financial results having been announced a month ago which showed a 9.2% decrease in quarterly earnings for the firm’s combined operations, it appears that reliance was placed on a strong November, which did not materialize, would have been necessary to maintain a positive direction.

Financials ADV declined 38% in November from the same month a year previous, compared to a 2% downturn in October compared with October 2013, citing a sustained period of continued low volatility in Continental European short-term rates impacting the Euribor ADV.

NYSE’s U.S. cash equities ADV increased 9% while U.S. equity options ADV decreased 19% over the prior November, and U.S. cash equities market share was 23.7%, with the U.S. options market share standing at 21.3% for the month of November.

For the full announcement from ICE, click here.

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