Retail FX Comes of Age: Leveraged Trading Is Here to Stay
Report Summary
Retail FX Comes of Age: Leveraged Trading Is Here to Stay
Retail FX represents a significant 7.9% of the overall FX market and promises continued growth.
Boston, March 23, 2011 – A new report from Aite Group outlines the genesis of the retail foreign exchange industry and quantifies its worldwide growth over the last 10 years.
In its simplest form, retail foreign exchange (FX or Forex) refers to individuals performing currency trading over the Internet, mostly for speculative purposes. Aite Group estimates that the global retail FX audience surpassed 8.3 million people at the end of 2010, and that retail FX currently generates daily turnover of US$315 billion. This amount is equivalent to 7.9% of the overall daily FX volume, and is already 32% larger than the average daily turnover for all other equity markets.
New regulations in major retail FX markets (including Japan and the United States) are expected to curtail the maximum leverage offered and bar unregistered brokers, moderating the rapid growth that the retail FX market has seen since 2005. These regulations are also triggering continued broker consolidation, higher standards, and lower trading costs. Conversely, the impact from these regulations is also attracting large new players to the space and setting the groundwork for continued, sustainable growth.
“A confluence of environmental factors--the adoption of personal computing and the Internet, as well as evolving regulations and technologies--led to the explosion of retail FX in a relatively short span of time,” says Javier Paz, senior analyst with Aite Group and author of this report. “The retail FX market has not yet reached mainstream distribution, but its daily turnover makes up a sizeable portion of the overall FX market, and its liquidity reverberates upstream through the institutional FX market.”
This 39-page Impact Report contains 13 figures and five tables. Clients of Aite Group's Wealth Management service can download the report.