Industry Updates

Flow Traders sees trading income fall 40% on declining ETP volumes

The decline in Europe ETP trading volumes has had the biggest impact

Theo Andrew


Flow Traders net trading income declined 40% year-on-year after reporting another “muted” quarter of exchange-traded product (ETP) trading volumes in Q3.

The Amsterdam-based market maker reported €334bn of ETP value traded across its global operations over the quarter, 18% down on the €409bn reported during the same period last year as low market volumes and volatility continued to impact its bottom line.

Europe accounted for most of the decline, down 28% to €127bn, followed by the Americas where volumes fell by 14% to €181bn. Asia, where the group has the smallest presence, grew by almost a third to €26bn.

As a result, the group reported net trading income of €67.6m, down on €111.7m reported in Q3 2022.

The results compound a tough year for the group whose pre-tax profit has declined 63% to €54.6m over the first nine months of the year.

In the first half of 2023, Flow Traders said ETP trading volumes hit their lowest point in two years.

The decline in ETP trading volumes in Europe had a particularly heavy impact on the group’s income.

It said major exchanges across the continent – Euronext, Deutsche Boerse and the London Stock Exchange – reported equity volume declines of roughly 20% year-over-year in July and August.

“Trading volumes remain muted in the quarter, given the seasonally quiet summer period and lack of notable economic or geopolitical events,” Eric Pan, investor relations manager at Flow Traders, said.

“Financial markets go through cycles of heightened and subdued trading activity and volatility, and the current period merely reflects this cycle post the heightened activity and volatility we saw over the last few years.”

Despite this, Flow Traders CEO Mike Kuehnel added volatility had risen in recent weeks following the start of the war between Israel and Hamas.

“We saw an improved trading environment in the third quarter when compared to the second quarter, though volumes and volatility were still down significantly compared to the same period last year.

“We are, however, seeing a slight increase in volatility after a period of subdued market activity.”

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