FXCM and FxPro confirm global end-of-year volume slowdown

FXCM and FxPro (both members of LeapRate’s Approved List of Forex firms) both filled us in with the missing pieces of their 2011 volumes yesterday. And while both companies summed up very good years overall – FxPro confirmed its position as one of the leading Europe-based firms with volumes consistently in the $100-billion-per-month range, and FXCM grabbed the #1 global-firm-by-volumes mantle – the volume results of both firms confirmed what we have seen (and written about) from others, especially the Forex ECNs. Simply put, Q4 2011 saw a significant global slowdown in Forex volumes.

FXCM reported December 2011 retail volume of $288 billion, its lowest levels since January and February, although it should be noted that its December volumes are traditionally a little lower due to the end-of-month holiday season. Nevertheless, FXCM had a very good year with retail volumes up 19% compared to 2010, and more impressively institutional volumes up 56%. FXCM now consistently does more than $100 billion per month of institutional volume.

FxPro actually showed very consistent numbers in 2011, with volumes hovering right around the $100-billion-per-month level all four quarters. FxPro showed nice expansion in the increasingly-important Asia segment (see graph above), with Asia contributing more than half (51.2%) of FxPro’s volumes in 2011. Q4, however, saw a significant dropoff for FxPro in revenue-per-volume and overall revenue, due in part to FxPro’s continuing switchover to an ECN model, but also highlighting the increasing price competition in the Forex business. On roughly similar total volume to Q3, FxPro’s revenue fell by 37% to $17.0 million from $27.2 million in Q3.

It will be interesting to see if we see a similar pattern (in a drop in revenues) from some of the other Forex firms, once we get to see Q4 revenue numbers from some of the public Forex firms such as FXCM, Gain Capital, Swissquote over the coming weeks. Stay tuned….

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