Interactive Brokers Losing Profits
The United States Securities and Exchange Commission released public data that indicates Interactive Brokers has lost $5 million in the retail forex market. This comes after the exchange has had multiple setbacks in the market, with the Connecticut-based firm being the worst grossing in America for six months. Subsequently, there have had an overall drop of 30% throughout 2019. After hitting their high of $103 million in June 2019 that has dropped to $70 million by December. The margins began to be drastically affected in September when a month-over-month declining steep in profits occurred.
What comes as an even greater loss for the brokerage is that, with the report released by SEC, it was noted that registered exchanges in the United States saw an overall increase of 2% in profits monthly. Over September to October, profits rose by $10 million for the US Market. This allowed for FX Trading to become a 634 million dollar monthly industry, with Interactive Brokers being the only firm to lose profits consistently. Many are beginning to question if funds were stolen from reserves, providing a more viable reason for the drop-offs in profits.
Gain Capital & Oanda
The news that Interactive Brokers is failing as an exchange shouldn’t be discouraging for investors or traders. Gain Capital has seen significant growth over a monthly basis, with their average profits growing to $4 million. They aren’t the only exchange to see rapid advancements in trading activity and profit, with the Oanda Firm seeing profits rise to $10.3 million in October.
Both of these firms compete directly against each other, with their distribution efforts differing from one another. This is what prompted the lower profits from Gain Capital, showing that the distribution model maintained by the Oanda Exchange is more viable. Oanda Exchange now manages 46% of the market share, with Gain Capital holding 38%. When it applies to Interactive Brokers, they have only 10% of the total market share.