Trading volumes on institutional FX platforms surged in September after fears over the impact of recent developments around Russia’s military invasion of Ukraine sent speculative asset classes reeling.
FXSpotStream’s trading venue, the aggregator service of LiquidityMatch LLC, reported yet another record for its currency trading volumes. Specifically, September’s total turnover came in at $1.613 trillion, which was higher by 15 percent from $1.4 trillion in the previous month and also rose by 52 percent on a yearly basis.
September’s average daily volume (ADV) was reported at $73.35 billion. The figure is a new all-time high, besting the previous record set back in March at $70.11 billion.
Additionally, the ADV metric was higher by 20.4 percent on a monthly basis and increased 51 percent year-over-year when compared with $48.35 billion in September 2021.
The total monthly volume across FXSpotStream’s streaming and matching products was comfortably above the $1.2 trillion mark in the last six months. The activity got off to a strong rebound as the financial markets kicked off the new year in high gear, with a multitude of factors helping steer volumes across several venues.
A big jump in trading activity
These difficult conditions could become increasingly common as investors brace for plenty of hurdles as conflict between Russia and Ukraine has been causing knock-on effects globally, which pumped up FX hedging trades.
The high volatility helps FX platforms shine when the market is anxious and trading activity is high, but low volatility then hurts when things settle down. With nobody having a clue so far, other institutional FX platforms are also expected to report higher trading activity.
FXSpotStream provides a multibank FX aggregation service for spot FX trading. The platform operates as a bank-owned consortium that provides the infrastructure to facilitate the route of trades from clients to liquidity providers.
FXSpotStream’s offering is a client-to-bank platform, with each liquidity taker required to create individual credit relationships with participating banks. This differs from other multi-dealer platforms, such as FX ECNs like Hotspot and EBS Markets that operate with centralized order book systems for their participants.