What can we infer about FXCM US accounts transfer from GAIN’s FY 2016 report?

Maria Nikolova

The incremental revenue GAIN expects from FXCM’s transaction for FY2017 is actually based on what Glenn Stevens called a “hybrid model”.

FinanceFeeds continues to explore the details of the transaction that saw the US retail client accounts of FXCM transferred to Forex.com, the retail FX subsidiary of Gain Capital Holdings Inc (NYSE:GCAP). Yesterday, GAIN posted its results for the final quarter and full year of 2016, with the press release containing a rather bullish statement by GAIN’s CEO Glenn Stevens, saying that the company is pleased with the activity of newly acquired FXCM customers in the first week following the completion of the transfer.

In the subsequent conference call, however, Glenn Stevens and GAIN’s CFO Nigel Rose were much more subtle when it came to the actual activity of transferred FXCM customers.

According to the announcement, Forex.com’s active client accounts in February 2017 amounted to 133,027, an increase of 4.6% (or about 6,000 accounts) from January 2017. This sparked questions during the conference call (rough transcript can be viewed at SeekingAlpha) about what part of this rise can be credited to newly acquired FXCM accounts.

According to both Glenn Stevens and Nigel Rose, the majority of the growth is non-FXCM, because only two of the trading days in February 2017 had any customers of FXCM US. Mr Rose also noted that FXCM customers are not used to the platform having just migrated across. These two days are not as active as any two days in the future, when the new customers get used to Forex.com’s services.

Regarding the number of accounts acquired vs accounts active, Mr Stevens stressed that indeed 47,000 accounts were transferred from FXCM but according to the latest data from FXCM itself, it had 26,000 active accounts in the final quarter of 2016. How many of these remained active in 2017 and how many would be active with Forex.com is uncertain.

A final aspect to consider is that, with relation to FXCM accounts acquisition, GAIN said it expected $15 million to $20 million of incremental revenue for fiscal year 2017 with minimal cost associated with that revenue.

During the conference call, Glenn Stevens explained that this estimate is based on some sort of a hybrid model, that is, it does not only include GAIN’s metrics from its internal operations but also metrics FXCM is providing in its disclosures. So, there is a lot more information needed to produce a precise estimate.

Read this next

Metaverse Gaming NFT

DCentral Miami brings together all of Web3, NFT, DeFi, Metaverse

The world’s biggest Web3 meeting entitled DCENTRAL Miami is set to take place November 28-29, featuring a lineup of some of the biggest and most influential names in the blockchain space.

Digital Assets

Crypto ban expands across UK banks as Starling joins ‎crackdown

UK digital bank Starling has banned ‎all customer payments related to cryptocurrencies, another blow for the crypto traders ‎who recently saw a sizable number of banks deciding not to ‎finance the wobbly asset class.‎


Markets Direct at FIA EXPO 2022: Traders know what they want from brokers

The FIA Expo 2022, one of the most prestigious events within the global derivatives trading industry, took place in Chicago on 14 & 15 November.


FIA Expo 2022: TNS addresses public cloud limitations with hybrid infrastructure

November is the month of the FIA Expo, one of the largest futures and options conferences in the world, bringing together regulators, exchanges, software vendors, and brokers in one place: the Sheraton Grand Chicago Riverwalk. 

Retail FX

Italy’s regulator blacks out Finance CapitalFX, MFCapitalFX

Italy’s Commissione Nazionale per le Società e la Borsa (CONSOB) has shut down new websites in an ongoing clampdown against firms it accuses of illegally promoting investment products in the country.

Retail FX

Suspected leader of Honk Kong ramp-and-dump scam appears in court

A leader of a sophisticated ramp-and-dump scheme made his first court appearance in a Hong Kong court today, charged with market manipulation and various criminal offences. The case stems from an earlier joint operation of Hong Kong’s financial watchdog, the Securities and Futures Commission (SFC), and the local police. 

Institutional FX

Cboe’s James Arrante discusses growing demand for fixed income, FX algo

We caught up with James Arrante, senior director of FX & US treasuries product and business management at Cboe Global Markets, to uncover emerging trends in the FX and fixed income markets and learn more about the bourse operator’s recent initiatives.

Retail FX

Eurotrader acquires UK broker Petra Asset Management

Eurotrader Group has formally entered into the UK market with the acquisition of FCA-regulated broker, previously named Petra Asset Management Ltd. The new entity operates under the brand name Eurotrade Capital Ltd.

Inside View, Retail FX

The Game of Chess Continues – OPEC, China and the Oil Market

Over the past decade, the US has been complaining about the amount of power which the BRIC group, and specifically China, has on the global economy. BRIC stands for Brazil, Russia, India and China; these were the world’s fastest growing economies. Only in the past 10 months, the US has turned their attention toward OPEC due to the prices of fuel. Nevertheless, China seems to have a strong influence even over the price of crude oil.