LeapRate’s Retail FX Volume Index rises 10% in March as FX volatility and traders return after Swiss Franc crisis

After a one month lull, the FX market roared back in March and registered its third best-ever month for trading volumes. Both retail and institutional platforms registered healthy gains over February.

The FX trading industry exited 2014 with a lot of momentum and several of the sector’s leading brokers reporting month after month of record trading volumes. There was a lot of reason to believe that 2015 was going to see a continuation of the good times.

Then came January 15, and the now-infamous action of the Swiss National Bank, leading to a 20%+ spike in the value of the Swiss Franc against most major currencies. The SNB’s actions sent the currency markets into instant turmoil, generating huge losses for several of the world’s leading forex brokers and liquidity providers – clients which made (huge) money on the Franc move had to be paid, while the clients who lost (huge) to the brokers only had a fraction of that amount on deposit with the brokers thanks to the large leverage most brokers provide.

Sources: LeapRate research, monthly and quarterly volume reports of various Forex ECNs and Forex brokerage firms.

Gerald Segal, LeapRate Managing Director, commented:

Many brokers and FX liquidity providers responded to the Franc spike by conservatively lowering allowed leverage, leading to a large drop in FX trading volumes in February.

However March saw a nice turnaround, as margin requirements were relaxed as the FX markets returned to ‘normal’ volatility, and traders came back to their screens.

The LeapRate Retail FX Volume Index is a monthly measure of activity, stated in billions of dollars per day. It is calculated using proprietary formulas developed by LeapRate. The data input into the model are based on examining monthly and/or quarterly activity levels put out by various retail FX brokerage firms; similar activity levels announced by other FX aggregators such as Forex ECNs (e.g. Thomson Reuters FXall, ICAP-EBS, Hotspot FX) and FX settlement firms (e.g. CLS Group); as well as anecdotal evidence we encounter as part of our general research activities in the Forex sector.

About LeapRate

LeapRate is an independent research and advisory firm, covering the world of online Forex, Binary Options and CFD trading. LeapRate is followed by thousands of traders, investors and other Forex Industry participants via our website, TwitterRSS, and our Forex Industry News email newsletter. Other LeapRate services include:

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