Average forex e-trade sizes on the rise

The average size of electronic trades conducted by corporates was $7 million in 2004 – up from $6 million the year before, the firm found in its annual survey of the FX industry, which is compiled from 2,000 client interviews. Real-money investors' average e-trade size went up from $4 million to $5 million over the same period.

But average deal size for leveraged, or highly active investors – those trading more than $30 billion a year according to ClientKnowledge's criteria – was down to $5 million in 2004 from $11 million the previous year.

This may be partly explained by the disappearance of the 'nibblers' – those trading small amounts electronically every now and then – in e-FX, explained chief executive Justyn Trenner in London. "In 2002 there were two types of users in e-FX – the early adopters and the nibblers," he said. The nibblers were not so active last year, as the market contracted – enabling average deal sizes to grow. "But in the past year a second wave of nibblers are back as serious adopters," he told FX Week.

Geographically, the biggest change in electronic deal size over the past year has been in Japan, the firm's research shows.

Here, corporates' maximum deal size traded electronically has soared to nearly $20 million, up from $5 million the previous year. This may be because the non-domestic banks trading in Japan – UBS, Deutsche Bank and Citigroup, for example – are the highly active players.

European corporates' average deal size is also up – this year to nearly $10 million, from just over $5 million last year. But Asia ex-Japan and US corporates are seeing declining average deal size. For US clients this was down to $3.9 million in 2004 from $4.6 million last year, and in Asia down to $6.1 million from $9 million in 2003.