Carpe diem: forex beats the retreat

Last week, Icap and the Chicago Mercantile Exchange both recorded new highs in foreign exchange trading for September. Icap said average daily volumes on EBS hit a new record of $274.2 billion, up 43% on September 2007. In the 12 months ending September 30, volumes rose by 31% over the corresponding period in 2007 to $219.2 billion.

The month of September, a roll month, was the highest-volume month on record for CME's FX business, with volumes reaching a total notional value of $2.31 trillion, up 3.9% on the previous monthly high of $2.23 trillion set in June 2008. The total notional figure is up 54.1% on September 2007's $1.50 trillion notional value.

A record was also achieved in contract terms, with a total of 17.5 million contracts traded in September, 9.3% up on the previous monthly mark of 16 million set in June 2008. The average daily notional value was $110.21 billion or 834,807 contracts a day.

The CME said total volumes were up on August's, with the notional gaining 22.3% from $421.57 billion and contracts at 13.84 million, up 26.6%.

The International Securities Exchange, meanwhile, recorded a 398.4% rise in average daily FX options volumes in September versus the same time last year. Although starting from a low base, average daily contract volumes rose to 153,000 last month from 31,000 in September last year.

According to the dealers, clients are generally still trading, signalling the strength of the industry and a perception that trading opportunities are still available to generate returns despite potentially wider spreads.

When asked how the financial crisis affected online trading company ACM, its managing director Nick Bang said: "The current turmoil in the financial, and mostly banking, sector generated huge volatility in the market. Most of our customers consider these moves more as profit opportunities. ACM's traded volume has soared consistently in the recent weeks."

Even electronic communications networks report that, while markets are not fully back to normal since the demise of Lehman Brothers, they're on the road to recovery.