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Big Get Bigger, Small Get Smaller In US Retail FX

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CFTC March data shows US Retail FX is becoming more concentrated among largest six FX brokers.

CFTC, trade fx, fx trading, retail fx, client assets, fxcm, oanda, alpari, fxddU.S. Retail Forex assets data for March is now out, courtesy of the CFTC, and it shows a few interesting things -- all leading to the conclusion that the US Retail FX industry is becoming increasingly concentrated -- and the US consumer is seeing less and less choice. Fairly difficult and expensive-to-follow US regulations have priced all but the largest US FX brokers out of the market.

For some of the specifics (see data table below):

  • Overall, US retail FX clients assets rose 1% in the month from February to $647.9 million -- not really a big deal. But...
  • ... ALL of the large US FX brokers (Oanda, FXCM, Gain Capital, et al) saw an increase in assets, while ALL of the smaller firms (except RJ O'Brien) saw a drop in assets.
  • The March data also shows that Gain Capital didn't actually capture all of the FX Solutions clients they supposedly bought in February -- FX Solutions' reported client assets went down by $11.2 million (as expected), but Gain's reported assets went up by a smaller amount, $8.1 million. This highlights just how hard it is to actually 'sell' Retail FX clients. Clients hold no loyalty to the acquirer, and often move on to other brokers.

We expect to see more of the few remaining medium and small US brokers leave the US in the coming months, following in the footsteps of GFT and FX Solutions, both of whom recently sold their US businesses to Gain Capital.

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For more on the global Forex industry see the LeapRate-Dow Jones Forex Industry Report.

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