GAIN Capital – we made a profit yesterday


On a day when several of its rivals lost (a lot) of money or got by with a manageable amount of losses, Gain Capital Holdings Inc (NYSE:GCAP) has put out a statement that they actually turned a profit when all was said and done yesterday.

We believe that Gain put the statement out to counter any potential rumors or shorting / selling of its shares, given what has already happened to its rival FXCM Inc (NYSE:FXCM) in premarket trading. FXCM shares are (as of this writing) down more than 90% (!!) to just $1.17 in premarket trading.

Gain Capital’s statement follows, and can also be seen here.

GAIN Capital Provides Further Comments on Extreme Volatility of Swiss Franc

– Company generated a profit amid high levels of customer trading activity

– Company’s financial position remains strong and is operating under normal conditions

BEDMINSTER, N.J., Jan. 16, 2015 /PRNewswire/ — GAIN Capital (NYSE: GCAP, “GAIN” or “the Company”) today provided further comments on yesterday’s extreme volatility in the Swiss franc.

GAIN generated a profit for the day, considering both trading profit and negative client equity, leveraging its robust risk management framework and heightened customer trading activity following the surprise announcements by the Swiss National Bank.

“Our strong risk-management framework allowed us to generate a profit on one of the most turbulent days for the global currency markets in recent years,” said Glenn Stevens, CEO of GAIN Capital. “We remain focused on managing our risk, taking a conservative approach to managing our exposure to global currencies, while providing liquidity and high-quality execution to our global client base,” added Mr. Stevens.  “Events such as the SNB announcement, although unexpected, can be mitigated in their impact using a comprehensive, consistent approach to risk management, a focus on maintaining robust, scalable trading technology and vigilantly focusing on our customers.  We have positioned ourselves to effectively manage risk during both calm and tumultuous markets and our performance during this recent event shows that,” concluded Mr. Stevens.

As part of its risk management framework, GAIN actively assesses evolving market and other risks and takes steps to address them.  An assessment of the risk exposure relating to EUR/CHF led GAIN to increase client margin requirements to 5% effective September 26, 2014 in order to help mitigate negative client equity in the event of a major event.

“Following the events of January 15, 2015, we remain well capitalized, financially sound and well positioned to grow market share and, as one of the industry’s leading consolidators, take advantage of the strategic acquisition opportunities that will result from yesterday’s events.  Our market-leading product offering and client execution means we are well placed to meet demand for online trading in foreign exchange, CFDs and other products,” Mr. Stevens concluded.

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GAIN Capital - we made a profit yesterday

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