The Forex space in the United States is one of increased competition between a number of heavyweight firms, including Oanda, GAIN Capital, IG US, Interactive Broker and TD Ameritrade. All of these firms reported skyrocketing performance numbers earlier in the year during massive swings in market prices, increased trading volumes and interest from beginner traders.
The latest CFTC monthly report for July 2020 shows that these firms are now experiencing the opposite effect, with many showing a decrease in the amount of retail trader funds held at the brokerages. In fact, only Interactive Brokers and TD Ameritrade were able to increase their customer deposits during the month. Specifically, Interactive Brokers grew their retail deposits by $6.6 million, which is roughly 10% month over month. TD Ameritrade posted a 6% increase to $67.3 million in the same time period.
The largest decline in deposits was posted by GAIN Capital, which was recently acquired by INTL FCStone to form the new brand StoneX. Deposits at the New Jersey based brokerage fell 4% or $8.4 million to $213 million last month.
The drop in retail deposits at some of the firms echoes the developments witnessed also at other FX and CFD brokers in Europe and elsewhere, which have seen a decline in trader activity and interest as Covid-19 induced market volatility has subsided over the summer months. It remains critical for brokers to continue to engage their customers in order to continue to sustain revenue and income, especially in cases where a large number of new customers entered the market during the hectic pandemic period earlier in 2020.
While Gain Capital still retains the largest market share in the US based on deposits and accounts at 38%, OANDA is not far behind with 35% and can arguably take away market share going forward by effectively engaging the thousands of new customers who joined in the last 6 months.
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