Gain Capital’s Q1 release confirms strong volumes and margins

Gain is finally beginning to see nice returns from its Gain GTX institutional business.

We had already reported on Gain Capital’s (nice!) Q1 results, which were pre-announced by Gain two weeks ago when Gain rejected FXCM’s hostile takeover bid, and instead announced its own acquisition of GFT.

Nevertheless, we did learn some new things about Gain Capital, its trading volumes, and its operating margins, when Gain released late yesterday its formal Q1 earnings announcement. We would note the following highlights:

Gain’s retail trading volumes were $144 billion per month in Q1, and about the same in April. Both were nice improvements over 2012, when Gain averaged less than $100 million per month in the second half of last year.

Gain’s margins — or pips-per-trade-earned — have been steadily increasing in its institutional business, which is finally generating reasonable revenues for Gain. Gain’s institutional business accounts for 67% of volumes, yet still accounts for only 24% of revenues. However that’s still a healthy improvement from last year, where institutional revenues were only 14% of overall company revenues.

We’ll see later today how the stock market reacts to the results announcement. As we’ve reported before, Gain Capital’s shares have taken a 20% hit since rejecting FXCM in favour of buying GFT. However yesterday Gain’s shares were up 5%, in advance of the (already seen) earnings announcement.

Small footnote — Gain also committed to, like FXCM does, giving us monthly volumes on a timely basis going forward. Stay tuned to LeapRate…

For the complete Gain Capital Q1 earnings announcement click here.

For the Gain Capital Q1 investor presentation click here.

For more on the global Forex industry see the LeapRate-Dow Jones Forex Industry Report.




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