Cboe FX volume hits two-year high as market volatility hightens

Cboe’s institutional spot FX platform on Friday reported ‎its trading volumes for February 2022, which took another step forward as a rise in volatility encouraged more buying and selling ‎of currencies.‎


During February 2022, Cboe FX disclosed a total trading volume of $840 billion, up 9.4 percent on a month-over-month basis from $768 ‎billion in January‎. This figure is the best reading for the exchange’s monthly turnover since it hit a yearly peak for 2021 in March at $880 billion. In addition, it was higher by 13 percent year-over-year when weighed against $743 billion in February 2021.

The exchange’s institutional FX trading venue saw its average daily trading volumes amounting to $42 billion in February 2022, up 15 percent month-over-month from $36.5 billion in January 2022. The ADV figure was the highest since March 2020.

On a year-over-year basis, the ADV numbers released by Cboe FX, formerly Hotspot, illustrated stronger performance, rising by 13.5 percent when weighed against $37 billion a year earlier.‎

Cboe FX turnover crossed the $1 trillion milestone in 2021 amid coronavirus-driven volatility that has shaken awake previously slumbering FX markets. However, activity at major institutional ECNs has been consolidating last year as intense chaos triggered by Covid-19 lost some steam.

Cboe widens FX market share

Cboe’s foreign exchange franchise saw its market share at a new all-time high of 17.0 percent in the Q3 2021 compared to 15.9 percent in last year’s third quarter. During the period, the demand for Cboe’s versatile products had been revived by concerns over the COVID-19 pandemic and uncertainty surrounding the FED’s policy even as it drove many investors onto the sidelines.

Recently, Cboe FX Markets teamed up with XTX Markets to launch a hosted algorithmic execution service. The connection between the London-based market maker and Cboe comes as algo trading as an execution strategy gains popularity with FX traders.

XTX Markets’ Execution Algo now enables Cboe FX users to benefit from its implementation shortfall execution algorithm, which aims to reduce slippage to arrival price. The institutional FX venue has also secured exclusive rights over use of the XTX Algo in the anonymous ECN space.

Cboe also completed the technology migration of Canada’s largest dark pool stock trading platform, MatchNow, which was acquired in 2020 from Virtu Financial for an undisclosed price.

We caught up with Ben Leit, global head of FX & FI sales at Cboe, to uncover emerging trends in the FX industry and learn more about the bourse operator’s recent initiatives.