The growing FX retail trading market


Last week, I attended an Aite conference on FX retail trading. Some very interesting statistics were presented by Javier Paz, senior analyst from Aite.

Below are some of the highlights:

• FX retail trading is dominated by self-directed pros (approximately 500k users is US), self-directed amateurs (25M users), and normal investors (55% of US population)

• FX trading has a low barrier to entry for individuals with only about $1000 required to open an account.

• FX trading thrives on economic uncertainty and poor stock market.

• 2009 was a banner year for retail FX trading with over $70B in total volume; trade volumes in 2007 were approximately $34B.

• Industry regulation is growing as volumes increase and more and more non-professional individuals join the ranks.

• The main regulators in this space are CFTC, SEC, and OCC/FDIC.

• “Social investing” is a growing trend driven primarily by this nascent industry and lack of understanding investors have about FX.

• Google and Facebook have entered this space and are poised to help continue these trends and grow trading volumes.

3 Responses

  1. Good post Jose, according to data from the Bank of international Settlements (BIS), Retail FX accounts for around 10% of daily FX volumes, through retail FX Aggregators.

    Importance of retail flows, and the use of the retail aggregators. Trading by households and small non-bank institutions has grown enormously, with market participants reporting that it now accounts for an estimated 8–10% of spot FX turnover globally ($125–150 billion per day).

    More on this here: https://singledealerplatforms.wordpress.com/2010/12/13/top-sdp-fx-vols-up-200-according-to-latest-bis-data/

  2. 2009 was a banner year for retail FX trading with over $70B in total volume; trade volumes in 2007 were approximately $34B.

    it’s daily volume ? in US or globally ?

    • Trading volume stats are global daily trading volume. Daily trading volume are projected to continue to grow, although there was a decline in overall retail trading in Q42009 through Q12010 according to some reports I have recently read. Growth in retail FX trading has been driven by the advanced trading platforms that have emerged in the last couple of years. These trading platforms have put a greater emphasis on the user interface (GUI) making it easier and more intuitive for traders. These new platforms are also emphasizing social networking. Social FX trading has been growing in the last few years led by platforms such as Currensee.

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