IS Risk Analytics' View From the Desk - January 2021

Posted by Fred Gewirtz on Feb 4, 2021 1:41:11 PM

January volumes were in line with 2020 monthly averages, but profits slipped rather markedly. Losses were driven by a rebound in USD and EUR retracement. Gold volumes were up primarily from its move lower early in January, and gold showed consistent profitability for brokers overall during the month. The latter part of the month was relatively flat but closed with an uptick in volume due to US equity volatility impacting the broad market.

IS Risk Analytics' View From the Desk - December 2020

Posted by Fred Gewirtz on Jan 14, 2021 5:29:08 PM

Activity in the first two weeks of December was enough to make the month a relatively strong one for brokers despite volatility waning as the month progressed. Early month profitability was driven by retail clients shorting EURUSD into what ended up being a broad-based USD selloff. As the holidays approached, markets became range bound and profitability and volumes suffered, but full month figures ended up in line with 2020 averages.

IS Risk Analytics' View From the Desk - November 2020

Posted by Fred Gewirtz on Dec 4, 2020 1:14:41 PM

Buoyed by early month volatility that arose surrounding vaccine news, November volumes exceeded October’s even though activity trailed off sharply late in the month. The vaccine news prompted a sharp gold selloff that many brokers were on the wrong side of, but total monthly profits far exceeded the depressed figures from October and finished in line with 2020 monthly averages. December is historically a slow month in the markets, but with Covid cases still surging and a Brexit deadline looming, this year could prove to be an anomaly.

IS Risk Analytics' View From the Desk - September 2020

Posted by Fred Gewirtz on Oct 6, 2020 8:23:14 AM

September volumes slumped slightly from August figures, and profits dipped as well. However, most brokers were able to post respectable overall statistics due to relatively strong early to mid-month gains. The month also saw a reversal from August trends, with equity indices pulling back and both oil and gold selling off. The movement in gold drove the majority of PL volatility during the month.

IS Risk Analytics' View From the Desk - July 2020

Posted by Fred Gewirtz on Aug 5, 2020 1:45:39 PM

After a relatively quiet start to the month, the second half of July brought strong profits for brokers, allowing most to far exceed the results seen in June. Although volumes were only up marginally from the prior month, revenues were robust because of broad-based USD selling and the late month rally in metals. By the beginning of August, metals had reached all time highs and EURUSD was at a level not seen for 16 months.

IS Risk Analytics' View From the Desk - June 2020

Posted by Fred Gewirtz on Jul 7, 2020 2:33:13 PM

June profits and volumes were front-loaded with the bulk of PL in the first 10 days of the month, primarily due to broad-based USD selling. Profitability in that period was focused in EUR and JPY pairs, along with indices and gold. Mid-month activity was relatively flat, but the month finished well primarily because of the continuation of the gold rally. Overall, both profits and volumes recovered well from the lows seen in May.

IS Risk Analytics' View From the Desk - May 2020

Posted by Jeff Wilkins on Jun 23, 2020 12:44:36 PM

May volumes were very similar to April totals, but still far below the highs reached in February and March. Although volumes were in line with April, profits were far lower. Losses in oil suppressed profitability in the early weeks of May as the majority of retail clients held their long positions into the rally at the start of the month. Movements in indices later in May helped salvage respectable, though below average, overall profits for the month.

IS Risk Analytics' View From the Desk - April 2020

Posted by Jeff Wilkins on May 11, 2020 4:53:07 PM

April saw broker volumes fall off significantly from the near-record numbers recorded in February and March. Profits, though down as well, were respectable as a result primarily of mid-month moves in oil markets that saw prices fall briefly into negative territory. Profits were also buoyed by movements in gold and US indices. Oil prices will likely be in focus again in May as we approach the expiration of this month’s futures contract.

Risk Update: NFP – Are you ready?

Posted by Jeff Wilkins on May 7, 2020 5:32:29 PM

Nonfarm Friday is a day that used to be quite exciting for trading desks and traders alike, although the last couple years have been somewhat sleepy. After hovering in a tight range for an extended period of time, US Nonfarm Payroll figures dropped by 700,000 in the April release.

Risk Update: Mind the (Weekend) gap

Posted by Jeff Wilkins on Apr 14, 2020 11:44:03 AM

The recent rise in market volatility has left all brokers susceptible to being taken advantage of by predatory traders but this is particularly true for startups and smaller brokers. While the opportunities for traders to attempt to exploit brokers have always existed, current market conditions have exacerbated the risk with strategies ranging from weekend gap loading to depth of book and spread arbitrage.