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In the second quarter of 2011, US forex brokers profitability rates dropped. According to a fresh report generated by Michael Greenberg, Oanda is back to the top spot in profitability rate (although lower than in Q1) and also remains the biggest US broker in terms of clients.

It is important to note that a few things:

  • CitiFX is not represented in this report: this bank broker is regulated under another authority and isn’t obliged to report the number of clients and the profitability rate.
  • Tradestation is not represented: they still haven’t submitted their numbers.
  • Greenberg notes that with Tradestation, the overall number of US traders probably grew during this quarter.
  • GFT, which topped the list last time with an impressing profitability rate, had the sharpest fall but remains in second place.

See the full report here.

Greenberg analyzes the drop in profitability and puts the blame on high volatility. Regarding EUR/USD, that’s absolutely right. The pair saw strong moves in both directions, and extremely choppy trading, more than once. It is the most popular pair. By far.

Regarding other currencies, the picture is more complex. USD/JPY traded in a narrow range throughout most of the quarter. GBP/USD and AUD/USD traded in wide ranges and weren’t as choppy as EUR/USD.

It will be interesting to see what happens in Q3. Gold and silver are being banned, and there’s a stronger separation between the US forex industry and the rest of the world.

Regarding volatility, Q3 definitely began with a storm, now affecting not only euro/dollar but also all currency pairs.