42% Drop in Trading Volume for ActivTrades Plc
ActivTrades Plc, a broker that specialises in CDF Contracts that operates in financial markets across the world, published their financial results for the end of 2018. Just as with many other brokers in the retail trading space, they saw a significant drop in trading volume. This is a result of the European Securities and Markets Authority releasing new laws last year. This affected all brokers, specifically causing for a 42% drop in trading activity for ActivTrades PLC.
The Company Figures
The performance of ActivTrades PLC and all subsidiaries saw a high turnover for the year. However, the company has been able to remain in the positive by earning £38.71 million. This is only a 4.6% turnover when compared to the £40.6 million earned in 2017. The turnover can be accounted to the 11% drop in trading volumes for 2019, as caused by the restrictions from the ESMA that all our readers will know about now.
The Finance Director at ActiveTrades, Juan Scarabino commented on to Finance Magnates about this report, saying: “2018 was another great year for ActivTrades, which realised a profit before tax of £12.3m. The company has continued to improve the service offered to clients, and to expand its operations, with investments in staff, marketing, and IT contributing to 8% growth in administrative expenses compared with the previous year.”
MrScarabino continues by stating, “For the first time, the group’s accounts include the contribution of ActivTrades Corp, the successful new Bahamas subsidiary which was contributing 27% of monthly trading volume by the end of 2018. The leverage restrictions introduced by ESMA in August were largely responsible for the 11% year on year reduction in trading volumes, and in revenue of 5% to £38.7m. Lower volatility levels and regulatory restrictions in Europe continue to impact trading volumes and revenues in 2019. “
Bahamas Subsidiary has Solid Performance for 2018
The average monthly trading volume for ActivTrades dropped from a monthly $97 Billion to $56 Million. This caused a 27% decrease in monthly trading volumes. However, one of the subsidiaries of this broker in the Bahamas “ActiveTrades Corp” which works with customers outside of the European Union performed better than anticipated. They had 2,900 Net Funded Accounts created and totalled for 19% of the active traders for this broker.
Following the implementation in August of 2018, the average monthly trading volume fell from $97 billion per month to $56 billion, the report said. By the end of 2018, the company’s subsidiary in the Bahamas, which became operational in June of 2018, contributed to 27 per cent of the monthly trading volume.
Additionally, the operating profits for ActiveTrades PLC dropped by 4.6%. During 2017 it cost the company £11.68 million to run operations. The FX and CFD Brokers also saw a decrease in operations cost as well. When considering all the severe conditions in the market right now, it’s surprising to see one broker that has barely been affected by the ESMA’s new rules and regulations.