FX deposits jump 12pct at Interactive Brokers in August

The Commodity Futures Trading Commission (CFTC) has published its anticipated monthly report for August 2022, which covers data for FCMs that are registered as Retail Foreign Exchange Dealers (RFEDs) and those included as broker dealers that hold retail Forex obligations in the United States.

The total assets belong to the U.S. retail forex traders grew only slightly in August, limited by the overall static performance seen throughout 2022. With no major changes recently noted and a couple of months remaining in the year, the sector was tracking for a stable finish this year. Yet, forex products are still a tough sale in the United States, despite the obvious benefits that a highly regulated environment can offer to traders.

That should come as no surprise, though the prospect of lighter regulations July soon revive interest in the US market among foreign brokers, or at least help brighten the outlook for a retail industry that has struggled for quite some time under the provisions of the Dodd-Frank legislation.

Retail forex deposits in the US have been largely skewed positively during August. The FX funds held at registered brokerages operating in the United States came in at $515 million in August 2022, which is $2.4 million more than the ‎$512.6 million reported in July.

According to the CFTC dataset, three FX firms notched increases in Retail Forex Obligations including Charles Schwab, Interactive Brokers, and IG US. The best performer for the month was Interactive Brokers which saw an overall rise of $2.8 million to $23.4 million at the end of August 2022, or an increase by 12 percent month-over-month.

Other highlights from the CFTC’s monthly report shows that IG US has racked up $1.01 million in additional deposits, up 2 percent on monthly basis, to $26.3 million in August.

The newest comer to the US FX industry, Trading.com Markets, saw its customer deposits drop to $367,000, down 26 percent from $495,000 a month earlier.

Meanwhile, GAIN Capital’s clients’ funds were down $2.6 million, or one percent, from a month earlier. Further, retail deposits at OANDA Corporation dropped $1.3 million in August 2022.

Looking at the market share of different brokers, the overall distribution saw a slight change in August relative to the month prior. GAIN Capital lost 1 percent but remained the leader in terms of market share, commanding a 37.0 percent share. OANDA also solidified its stance as the second largest in the US with 33.0 percent market share – Charles Schwab and IG US retain a 15.0 and 10.0 percent share respectively.

The chart listed below outlines the full list of all FCMs that held Retail Forex Obligations in the month ending on August 31, 2022 – for purposes of comparison, the figures have been included against their July 2022 counterparts to illustrate disparities.