HotSpot FX to offer free trading till year end, whilst ADV hit 2.5 yr low

BATS Global Markets, who bought HotSpot FX earlier this year, has today announced plans to offer free FX trading till the end of the year once their new European matching engine when it goes live next month.

BATS has a reputation for driving low-cost execution, and this move is part of their initiative to drive down the costs of execution as the look to gain market share.

According to Chris Concannon, CEO of BATS:

“Europe is the leading global FX trading centre and a top priority for Hotspot. As the operator of the Continent’s #1 equities market , BATS intends to achieve similar status for our  European FX business.”

This moves can’t come soon enough, as Hotspot’s July 2015 ADV of $23.5bln/day, are down -8.6% on the June level of $26bln/day, and -20.9% YoY from July 14. They are also now at their lowest levels since Dec 2012 when they touched $19.6bln/day.

Looking at the charts below and comparing Hotspot with its smaller but faster growing rival Fastmatch, it’s clear that Hotspot needs to see increased volumes. So, it will be interesting to watch whether this initiative can ‘kick-start’ their volumes once the new matching engine goes live.

Hotspot vs FastmatchContrasting: Hotspot and Fastmatch FX ADV Jul 2015

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