Hotspot FX volumes take a tumble in October, will KCG proceed with sale?

KCG Holdings, Inc. (NYSE: KCG) yesterday released its total trade volumes for the month of October 2014.

In Market Making, KCG averaged $34.9 billion dollar volume traded, 5.4 billion shares traded, and 4.4 million trades per day in U.S. equities.

Within the firm’s Global Execution Services division, matters were somewhat different to the dynamic that has been experienced by other firms across the FX industry recently, with KCG’s venerable ECN Hotspot having experienced a downturn in notional FX volume to $34.3 billion per day compared to the $38 billion in September. Whilst many the results among many market participants exceeded those of September’s already high points during October, Hotspot was unable to sustain the upward direction in order flow.

This figure has come at a poignant time for KCG, with the firm having subtly indicated potential plans to seek a purchaser for its institutional FX ECN after maintaining a patient and long term perspective through relatively flat volume figures over the last year at a time when KCG itself was engaged in making substantial headway in paying the $535 million lein associated with its merger with GETCO after the catastrophic algorithmic trading error in August 2012 which very nearly sent the company into administration.

Indeed, with KCG having paid that off well ahead of anticipated maturity, and Hotspot only recently having begun to make headway in terms of volumes only for activity to tail off in October, it may be a shrewd move by KCG to investigate the possibility of moving the business unit on.

For the official announcement from KCG, click here.

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