Retail FX traders pull $25 million off US brokers in September

Retail FX deposits at US brokerages, which have been struggling to eke out a profit in a strict regulatory environment, dropped in September 2022 by $25 million, CFTC data showed.

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The brokers, including FCMs that are registered as Retail Foreign Exchange Dealers (RFEDs) and those included as broker-dealers, saw a collective negative change in clients’ deposits month-over-month from August, though differences amongst each broker were more pronounced.

Specifically, the FX funds held at registered brokerages operating in the United States came in at $496 million in September 2022, which is 5 percent less than the $515 million reported in August.

The newest comer to the US FX industry, Trading.com Markets, continues to take a bigger chunk of the overall retail funds, but at a very limited scale. The broker racked up $563,000 in customer deposits in September, up 53 percent from just $368,000 a month earlier.

The US arm of forex brand XM provides retail foreign exchange services to US traders amid a tough regulatory environment that has squeezed other providers out of that market. Trading.com first applied for a forex broker license in the US back in January 2019. The company, however, still has a long way to go to challenge the likes of GAIN Capital and Oanda, which command nearly 70 percent of the US retail market.

Other highlights from the CFTC’s monthly report shows that Interactive Brokers LLC (NASDAQ:IBKR) has racked up $27.7 million in total deposits. This was up by 5 percent from $26.4 million in the prior month.

After consecutive increases in its market share, GAIN Capital suffered a big drop in retail deposits in September 2022. Specifically, the US largest retail FX broker’s net balances decreased by $12 million, or 6 percent, to $178 million.

Meanwhile in September, Oanada saw a bigger decrease of nearly $7 million, or 4 percent on  a monthly basis, while retail funds at IG US dropped by 7 percent or $3.4 million.

Additionally, Charles Schwab reported some negative changes in client deposits, having fallen by $3.8 million or 5 percent month-over-month.

The chart listed below outlines the full list of all FCMs that held Retail Forex Obligations in the month ending September 30, 2022. For purposes of comparison, the figures have been included against their August 2022 counterparts to illustrate disparities.

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