Markets in the United States have seen a slow down in the number of deposits made by FX retail traders in the country. Deposits from FX traders had picked up during the few months before August, but for the past month, the markets experienced low deposits. The volume of deposits was affected by strict restrictions placed on FX markets and low volatility.
The CFTC reports that brokerages in the country received $537.9 million worth of deposits in August. This includes FCMs which are registered as Retail Foreign Exchange Dealers (RFEDs) and those firms registered as broker-dealers. In comparison with July, this figure is 17% lower. July saw these deposits amount to $648.6 million, $110 million more than the total achieved in August.
Losses made by interactive brokers
Interactive Brokers lost more than any other brokerage in the country on a percentage basis. The firm lost over 67% of its clients’ deposits, which are worth over $70 million. These losses will affect the firm and its clients significantly going into September as the low volatility may continue to chip into client deposits.
The losses incurred by Interactive Brokers came after the firm was the best performing brokerage over June and July. During that period, the company gained close to 30% growth.
There are other firms that suffered losses during August, but none as heavy as the losses incurred by Interactive Brokers. GAIN Capital lost $4.1 million in comparison to July. This represents a loss of nearly 2%.
OANDA Corporation also suffered losses of its own. The firm’s holdings fell by close to $38 million, a 17% decline in client deposits. This shows that August was a slow month for FX markets all round as client deposits were eroded.
One FX retail firm recorded gains in August, although the gains are small. TD Ameritrade saw an increase in its FX retail deposits which rose by 1%. The firm gained $809,376.00 during August.
Low volatility in FX markets
Money markets have been experiencing low volatility as traders feel the effects of summer. There is also an increase in the strict regulations imposed on these markets, and this is also affecting the funds that are poured into the markets. Brokerages will be hoping that these tides change within the next few weeks and gains can return to the money markets.