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Foreign Exchange

FXCM revenues rise 14%; outpace Gain Capital

FXCM, the electronic FX trading platform, announced 2011 full-year revenues of $412.4 million, a 14% increase versus the same period in 2010.

Retail customer trading volume for 2011 was $3.8 trillion, a 19% increase year-on-year, while institutional customer trading revenues increased by more than 50% to $1.2 trillion. According to Drew Niv, chief executive officer at FXCM, the results reflected a strong year in 2011 that saw its retail base grow 20% to 163,000 active accounts. FXCM also benefited from the acquisition of Japanese broker Foreland Forex in October 2011 that doubled the firm’s size in Japan, the world’s largest retail market.

 Source: LeapRate

Revenues in the fourth quarter, though down 4% from the previous quarter, were 9% higher than at the end of the same period a year ago and vastly better than rival Gain Capital, which last week reported its lowest quarterly revenue for more than five years.

Gain’s Q4 revenues were down 23% year-on-year and 41% lower than the previous quarter. “Interesting to note, though, is that despite having virtually identical volumes to Q4 last year, and three times more institutional volume, revenues were down 23% from last year,” says Gerald Segal, CEO at LeapRate.

“Revenues-per-volume are declining rapidly at Gain as – in our view – price competition continues to increase in the forex business.”

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