The French retail FX and contract-for-difference (CFD) market is still relatively young, with just 20,000 people who traded CFD and/or retail foreign exchange in the 12 months to February 2012, states Investment Trend’s 2012 France CFD and foreign exchange report. The report shows that 16,000 people used CFDs, 15,500 traded retail FX and 11,500 traders were active in both markets.
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According to the survey, a further 9,000 people who do not trade CFDs or retail FX intend to begin trading during the following 12 months. “This is a relatively young but very dynamic market,” says Pawel Rokicki, Investment Trends senior analyst.
“If we look at the more mature German CFD market, for instance, it’s twice the size of France’s, yet the number of people who intend to start trading is very similar.”
Based on previous analysis, Investment Trends estimates at least two thirds of those who expressed an interest to start trading within the next year will act on their intention.
Investment Trends found that a large proportion of CFD traders used to trade listed leveraged instruments, such as warrants.
According to the report, warrant traders who adopt CFDs tend to abandon their old products – while 38% of CFD traders had traded warrants before they started using CFDs, only 8% continue to use warrants.
“The very mature warrants market is twice the size of the CFD market in France, and presents a major opportunity for CFD providers,” says Rokicki.
Four main firms competing for market share
While the market in France has not produced an established market leader, several market-share metrics do point to a clear advantage to four providers – IG Markets, WH SelfInvest, FXCM and Saxo Banque.
IG Markets leads the way for CFDs, with a 24% market share, followed by WH SelfInvest, which has a 14% market share. In retail FX trading, the differences are less pronounced, with FXCM leading the pack with a 16% market share, followed by IG Markets, which has 14% of the market share.
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| Source: Investment Trends |
However, in terms of overall volume – calculated by trading size and frequency of users – the four firms are in close competition, with Saxo Banque marginally ahead of its competitors, with a 19% market share.
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| Source: Investment Trends |