ILQ's Client Funds Increase for 12th Consecutive Month

I was recently browsing the CFTC database for fun (I don’t get out much) and I stumbled across some interesting data. Every FX broker that is registered with the CFTC and NFA has to report the amount of customer funds they hold. As far as I know, it’s just the customer funds that are held at banks in the U.S. and not their total amount. (If I’m wrong or someone has access to worldwide numbers, please let me know)

I decided that it would be interesting to take the data for the larger brokers in the market and compare them to see how they have been performing. I chose: Oanda, FXCM, Gain Capital(forex.com), Global Futures, Tradestation(interbankfx), MB Trading, and Institutional Liquidity(ILQ). There are other brokers, but I wanted to keep it simple.

I first measured the quantity of customer funds for the respective months and then their monthly percentage of change. My starting point was October 2010 as it was the first occurrence of the “Total Amount of Retail Forex Obligation” category. My ending point is April 2012 because that was the last report issued by the CFTC and my crystal ball has thus far proven ineffective in revealing May’s report.

I think it’s important to note that these numbers are not an accurate indication of overall profitability or financial health for several reasons. First, they do not account for the costs of operating a business. Second, it’s impossible to gauge how much revenue is being derived from the customer funds held at brokerages because you don’t know: how much trading is actually taking place on average per unit of funds, the average amount of revenue generated per unit traded (due to spreads and commission varying), and how much revenue they gain from alternative sources (widgets that customers pay x dollars per month for. There are other reasons as well; but I digress…

These numbers are simply a measure of the quantity of customer funds held in the United States by these respective brokers. As most U.S. customers are restricted to accessing domestic brokers, these metrics can be loosely used to gauge competition.

You can view the complete data source here: http://www.cftc.gov/MarketReports/FinancialDataforFCMs/index.htm

The excel file can be currently found here: http://www.forexfactory.com/showthread.php?t=368685



BeamFX is an guaranteed introducing broker of ILQ. Join us in our free live trade room Mon. - Fri. 7:45 - 10:45 AM EST.