Update: Many readers contacted me asking why I think this is losses and not something else like withdrawals. The answer is I can’t know for sure but this is an unusually big drop in client deposits. I’ve compiled a study of client deposit changes since beginning of 2011 and there was only one drop in deposits bigger than September’s – in July 2011. That drop may be attributable to OANDA’s acquisition of a Japanese broker and perhaps moving many Japanese based accounts there. We cannot know this for sure and I’m in touch with them to find out. The chart of month on month deposit changes is below.
Every month CFTC publishes Futures commission merchants (FCMs) and retail foreign exchange dealers (RFEDs) financial data. Amongst other things CFTC also discloses Total Amount of Retail Forex Obligations – which is basically the total equity of retail forex traders that broker holds.
September 2011 report shows that US retail forex traders have lost about $20 million. This figure however is to be viewed cautiously as this report just shows changes in total capital and doesn’t specify reasons for changes. We can assume that the $20 million decrease in total retail forex obligations mostly came from losses due to high volatility experienced in September – but we cannot be 100% sure about all of it. Some brokers like ILQ, Tradestation and FXClub have even shown an increase in clients equity while brokers like Oanda have experienced a decrease of over $13 million.
What’s even more interesting is that while September 2011 retail forex obligations report indicates that many traders lost money in September, the Q3 2011 US forex brokers profitability report shows the opposite – clients’ profitability is actually up.
| 8.2011 | 9.2011 | change | |
|---|---|---|---|
| ADVANCED MARKETS | 1,527,782 | 1,392,951 | (134,831) |
| ALPARI | 10,829,320 | 10,595,935 | (233,385) |
| FXCM | 145,264,186 | 145,254,197 | (9,989) |
| FXCLUB | 3,097,749 | 4,488,081 | 1,390,332 |
| FXSOL | 17,325,490 | 17,083,483 | (242,007) |
| FXDD | 33,756,982 | 31,758,420 | (1,998,562) |
| GAIN | 97,819,890 | 98,486,559 | 666,669 |
| GFT | 91,754,561 | 83,813,305 | (7,941,256) |
| ILQ | 5,207,838 | 7,819,830 | 2,611,992 |
| IBFX | 31,623,759 | 30,232,166 | (1,391,593) |
| MB | 32,828,208 | 32,593,827 | (234,381) |
| OANDA | 161,477,887 | 148,089,093 | (13,388,794) |
| PFG | 33,991,858 | 33,213,234 | (778,624) |
| TRADESTATION | 37,336,604 | 38,537,987 | 1,201,383 |
| XPRESSTRADE | 578,289 | 936,685 | 358,396 |
| Totals | 711,381,458 | 689,675,561 | (20,124,650) |
Month on Month change in client deposits in 2011
These people has been remain the most gainer in the forex trade, what went wrong with them to lose such a huge amount of money?