Lukas Jaeger

Lukas Jaeger asked about client groups showing sustained interest in StoneX's pre-existing risk management contracts and trading services, particularly in the active ETF space. He also sought clarification on the 30% year-over-year decline in the FX and CFD business's rate per million, asking if it was primarily due to lower volatility. As a follow-up, he inquired about any particular currency pairings of interest to the self-directed client group.

Answer

Philip Smith (CEO, StoneX Group Inc.) highlighted a significant shift in regional banks in the U.S., who are increasingly interested in StoneX's broad product offering and ecosystem, seeing it as a one-stop shop for fixed income, SWIFT, payments, and overseas equities. Bill Dunaway (CFO, StoneX Group Inc.) clarified that the prior year's rate per million for FX CFDs was exceptionally high, and the current rate is more normalized, reflecting muted FX volatility. Philip Smith added that while specific currency pairs aren't published, Euro/Dollar is likely the largest, and gold trades like a currency, with Dollar/Euro, Dollar/Gold, and Dollar/Silver consistently high in volume.

Lukas Jaeger inquired about new client groups showing sustained interest in StoneX's pre-existing risk management contracts and trading services, specifically beyond the R.J. O'Brien and Benchmark acquisitions. He also asked for a detailed explanation of the 30% year-over-year decline in the FX and CFD business's rate per million and if there are any particular currency pairings of interest to the self-directed client group.

Answer

CEO Philip Smith clarified that a significant shift is observed in U.S. regional banks, which are increasingly interested in StoneX's broad ecosystem offering (fixed income, SWIFT access, payments, overseas equities, ADRs) as a single provider, noting this is becoming a 'door opener' and a source of 'sizable momentum.' CFO Bill Dunaway explained that the prior year's FX and CFD rate per million was a near-record high, making the current period's decline appear significant, attributing the current rate to muted FX volatility and a challenging retail environment, noting it's more normalized. CEO Philip Smith stated that StoneX does not typically break down interest by specific currency pairs, but noted that volumes are market-driven, with major pairs like Euro-Dollar, Dollar-Gold, and Dollar-Silver consistently high.