Brokers' Trading Volume Drop as Market Volatility Subsides

The coronavirus pandemic stirred up the entire financial market, creating greater volatility which can benefit brokers. We mentioned in previous articles that most forex brokers saw their trading volume rose sharply in March. Now that the epidemic gradually got under control, volatility in both financial market and forex market are subsiding, which also significantly reduced transaction volume of several brokers.

The May operating data recently released by online broker Kabu shows that the trader's performance fell for the second straight month in May after peaking in March. In May, Kabus online forex trading volume was 2.07 trillion yen, a month-on-month decrease of 8.1% from the previous month; the stock trading volume was 2.44 trillion yen, a decrease of 13.1% from April, and futures trading volume dropped 23.1% from April's 3.49 trillion to 2.68 trillion yen.

GMO Click also released its May transaction data on June 3rd. Data suggests the broker's May trading volume continued to decline after a drop in April. Specifically, GMO Click's total on-site trading volume in May was US$2.8 billion, a 9.7% decrease from the US$3.1 billion of April and significantly lower than the US$8.5 billion trading volume in March.

With the pandemic under control after measures were effectively implemented in China and some European countries, The once-soaring transaction volume began to fall as early as in mid and late April. According to the April data report of well-known broker Forex.com, the company's retail transactions in April totaled US$188 billion, a 51% decrease from Marchs US$388 billion; the average daily trading volume (ADV) also halved from US$17.7 billion to US$ 8.6 billion; futures recorded 567,189 transactions, down 20% month-on-month.

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