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An odd part of writing about this industry is that a lot of the time I’m not really looking at or caring what markets are doing, even though markets are driving almost everything that’s happening.
But for the casual observer, this year felt like it should have been a good year for business. Trump tweeted a lot, there was a relatively large drop in the S&P 500, oil went up and down a decent amount.
Generally it seemed like a lot of bad things were happening as well and, as we all know, there’s nothing like natural disasters, military conflicts, and plagues to put a smile on the face of a CFD broker. If you guys were there during the 10 Plagues of Egypt, you’d no doubt be popping the champagne as the locusts began circling overhead.
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And you did see signs of this happening.
I know one large broker had its best day ever in January after Nvidia crashed. I would not be surprised if that was later surpassed in April, when Pepperstone also had their busiest day on record.
XTB’s data shows they also had their largest ever levels of trading volume this year, surpassing $1trn for the first time in Q2 and then again in Q3.
However, XTB’s data shows the basic problem that firms have been having this year – volumes were really high but making money from that flow has not been easy.
This was particularly true in Q3, where the broker had its best quarter ever, in terms of volume traded, but where P&L per $m traded was only $84. If you go back over the last decade, this was the 6th worst quarter on record. Not catastrophic, but not great.
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The thing is that XTB now appears to be onboarding every person in Poland over the age of 18 as a customer. They have so many active accounts as a result, that they are still on track to have their best year on record, with higher client numbers offsetting the lower P&L of flow this year.
The same is probably true of some other firms. For example, Capital.com did total volume of approximately $2.25trn in the first three quarters of the year. Last year was their best on record and that was $1.77trn for the whole 12 month period.
However, I would imagine for some other firms that Q3 absolutely sucked. As XTB noted in their most recent financial report…
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“The decline in profitability was a consequence of low activity in financial and commodity markets in Q3 2025. For most of the instruments most popular among clients, the market exhibited a more predictable trend, moving within a limited price range. This led to market tendencies that could be anticipated with a higher probability than during larger directional market movements, creating favorable conditions for range trading.”
They also noted the gold price going steadily upwards in September. I would imagine that was the killer for most brokers. I don’t think it’s a secret that most firms have seen huge volumes in gold this year.
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For example, on the CME, you can see that retail-friendly gold e-mini and micro contracts saw year-on-year volume increases of 223.0% and 175.8% respectively for the period up to the end of November. In Indonesia you see the same phenomenon happening on local exchanges.
The problem with gold is that many firms offer terms that are insane. As I am writing this, for example, someone trading gold with IC Markets is getting better spreads than they would on the underlying market.
When you then factor in market depth on the exchange, then the prices feel kind of like a video game. IC Markets has a big enough balance sheet that it can afford do that. Can others?
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One sign that the answer to that is ‘no’ is that, much like at the Circle K in Bill and Ted’s Excellent Adventure, you have seen some strange goings on in the industry over the last couple of months. For example, SquaredFinancial gave back its CySEC last week and there have been some disputes over liquidity agreements at the firm.
SquaredFinancial’s Seychelles entity lists one of its execution venues as INFINOX, a broker which has frozen funds belonging to its liquidity partners over the last 12 months. Those freezes, however, seem to predate the gold rally from this year.
Maybe that’s all unrelated to markets but I would not be surprised if lots of stuff like this is going on behind the scenes and the reason was mainly because of what happened in Q3. If you are a big firm, like Capital or XTB, you have a good balance sheet and so much volume that it can help you weather the storm.
In contrast, if you are running a model where you book everything and have to give (1) insanely generous spreads and (2) massive rebates to IBs, then parts of this year were probably extremely hard. Your P&L is effectively a small proportion of spread + b-book revenue. If the latter is losing money then you get cooked.
The upside is that the final quarter seems to have been a lot better. No doubt many brokers fell to their knees to thank Allah when gold and bitcoin crashed in the last couple of months.
You’ve seen this come through with IG and CMC Markets’ latest results – both of which showed much better P&L in OTC trading for some of the final three months of the year.
Will that continue into 2026? I have no idea. What I do find funny is that many broker executives wanted Trump to come back, so he’d tweet dumb stuff and get the markets moving. That has happened, but it seems like it’s because of him being crazy (and the US / West asset freezing and sanctioning everyone in the world) that you are now seeing so many countries and individuals going long gold.
