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Daily retail FX volumes rise to $325 bln in third quarter -industry data

Reuters - UK Focus

By Patrick Graham

LONDON, Nov 3 (Reuters) - Online retail brokers traded $325 billion worth of currencies daily in the third quarter, down from record levels early this year but up from the previous quarter helped by a series of China-driven market shocks, industry data showed on Tuesday.

Previously viewed as a sideshow to the wholesale trading between banks and big investment and pension funds that forms the core of the $5 trillion a day global currency market, the retail sector has grown steadily in the last few years.

Retail currency trading has jumped this year in particular as a percentage of financial market activity, and volumes in the sector are up between 20 and 40 percent on the same period last year.

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Data and estimates published by industry news and analysis website Finance Magnates (www.financemagnates.com) showed volumes at Japanese brokers soared on the back of August's slump in Chinese stock markets and the devaluing of the renminbi, all of which drove a surge in the Japanese yen.

Trade on Japanese platforms, the biggest market for small leveraged bets on currency movements from non-institutional players, rose by $14 billion a day to $158 billion, lifting overall global volumes from $318 billion in the second quarter.

Japanese brokers Gaitame and Rakuten Securities both saw double digit percentage rises, raising them to sixth and seventh respectively in the website's ranking by trading volume.

The numbers, seen by Reuters but not verified with each of the companies, also showed volumes at U.S (Other OTC: UBGXF - news) .-based Gain Capital (NYSE: GCAP - news) , Interactive Brokers (NasdaqGS: IBKR - news) and FXCM (NYSE: FXCM - news) dipping.

One big issue for a number of players has been the blow to the sector from January's Swiss franc surge, which closed a handful of players and forced others, notably U.S.-based FXCM, to restructure their businesses.

FXCM held on to fourth place in Finance Magnates' ranking.

Hong-Kong's GMO Click took top spot despite a 17-percent fall in volume on the quarter while another Asian-focused operator DMM was second.

Two companies seeking to recoup money from clients who lost out in the Swiss franc trades, IG Index and Denmark's Saxo Bank, slipped respectively two and three places in the rankings to 10th and 8th. (Editing by Louise Ireland)