Swiss Franc move leads to a run on shares of publicly traded Forex brokers


Thursday’s incredible and unprecedented action in the currency markets following the collapse of the EURCHF 1.20 floor affected not just the currency markets, but also the shares of the brokers which offer leveraged currency trading.

Not only FX trading volumes were booming, but also trading in the shares of publicly traded retail forex brokers.

So just how did the shares of retail forex and CFD brokers do on Thursday? Here’s the list:

  • FXCM Inc (NYSE:FXCM) -15.1% (FXCM shares actually dropped another 12% in after-hours trading)
  • Gain Capital Holdings Inc (NYSE:GCAP) -7.8%
  • IG Group Holdings plc (LON:IGG) -4.4%
  • Plus500 Ltd (LON:PLUS)  -4.1%
  • Swissquote Group Holding SA (SWX:SQN) -3.8%

Not a pretty picture.

A number of brokers including  Gain CapitalPlus500, and Pepperstone put out releases that Thursday’s Franc-related events were not going to have a material negative impact on their financial results.

But others had more negative news to report.

IG Group stated that their exposure was going to generate losses, but that those losses would not exceed £30 millionFXCM indicated that clients experienced significant losses and generated negative equity balances owed to FXCM of approximately $225 million, and as a result it now may be in breach of some regulatory capital requirements.

And Thursday’s incredible action also saw the closure of New Zealand broker Excel Markets.

Also for the time being, quite a number of forex brokers seem to have suspended CHF pair trading, or at least limited trading to close-only. But that will only last a while, until the Franc finds its new trading level now that the Swiss Central Bank is apparently no longer going to interfere.

Stay tuned to LeapRate as we continue to cover all the fallout in the Forex industry from the Swiss Franc move.

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Swiss Franc move leads to a run on shares of publicly traded Forex brokers

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