IS Risk Analytics’ View From the Desk – September 2020

Fred Gewirtz

6th October 2020

IS Risk Analytics  - Monthly View From the Desk

September volumes slumped slightly from August figures, and profits dipped as well. However, most brokers were able to post respectable overall statistics due to relatively strong early to mid-month gains. The month also saw a reversal from August trends, with equity indices pulling back and both oil and gold selling off. The movement in gold drove the majority of PL volatility during the month.

Daily Volume Sep 2020*Average Daily Volume represents the daily volume from ISRA customers for each day of the month divided by the average daily volume for the month. Each day is represented as a percent of the average.

B book Sep 2020** Average Daily B Book PnL represents the daily B Book PnL from ISRA customers for each day of the month divided by the average daily B Book PnL for the month. Each day is represented as a percent of the average.

Source: IS Risk Analytics Database. Past Performance is not necessarily indicative of future results


The overall US death toll from the coronavirus surpassed 200,000 in September, and the country continues to record nearly 1,000 daily fatalities more than seven months into the pandemic. The US Congress continues to work on another round of stimulus to combat the virus’s economic effects. However, the House and Senate continue to be far apart in the negotiations. With the election looming in early November and the recent announcement that President Trump has tested positive for Covid-19, October could be a very volatile month in US markets. From a historical perspective, October tends to be a strong month for equities and risk-seeking opportunities, except in election years like this year, further supporting the looming uncertainty sentiment amongst retail traders at the moment.


After facing a second wave of new coronavirus cases, several European jurisdictions considered restoring lockdown measures lifted earlier in the year. Madrid is going back under a city-wide lockdown, and Paris is considering doing the same soon. Meanwhile, the eurozone saw a second consecutive month of deflation in September, which has intensified pressure on the ECB to inject more monetary stimulus into the economy. The Turkish Lira fell to record lows multiple times in September after inflation projections and targets were revised higher than expected. Many brokers have grown wary of Lira, choosing to further increase margin requirements.


China and India agreed not further to escalate the tensions arising from border clashes that led to a military buildup in the Himalayan region under dispute. However, that agreement appears tenuous as the two sides do not appear close to a final resolution to the conflict. Japanese Yen was one of the strongest performers in September in line with US equity and gold pullback. With Yen strength, the Nikkei 225 was one of the few indices to show a positive trend in September.