Some more observations from FXCM's Q4 results.
FXCM announced its Q4-2011 results (and Feb-2012 volumes) last week, which the stock market applauded by sending FXCM stock up by more than 12%. After having a bit more time to go through FXCM's press release and Q4 investor slideshow, we had a few more observations to share.
1. Margins - very steady in retail, but eroding in institutional.
A very positive note from FXCM's Q4 numbers is that margins from retail volume (blue line above) have remained very steady, at around 2.0 pips earned per round-trip trade over the past two years. This is where FXCM makes most of its money, and if FXCM can continue to integrate acquisitions (and grow volume organically) while keeping margins at this level, then we think the future is very bright indeed for FXCM.