The Best Small Cap Online Trading Stock? FXCM, GCAP & IGEX

Small cap stocks FXCM Inc (NYSE: FXCM), Gain Capital Holdings Inc (NYSE: GCAP) and up and coming Indo Global Exchanges PteLtd (OTCMKTS: IGEX) all offer online trading platforms to retail or institutional traders and investors. Certainly if you have found yourself trading more lately or if markets become more volatile, trading platforms are going to be the big winners. With that in mind, here is a close look at these three small cap trading platform stocks: 

FXCM Inc. A global online provider of foreign exchange  trading and related services to retail and institutional customers world-wide, FXCM Inc offers mobile trading, one-click order execution and trading from real-time charts while its UK subsidiary (Forex Capital Markets Limited) also offers CFD products and allows clients to trade oil, gold, silver and stock indices along with forex on one platform. In addition, FXCM Inc offers educational courses on forex trading and provides free news and market research through DailyFX.com. After coming out with a positive article last year ("A Fast-Growing Money Machine"), Barron's had a slightly bearish article in the middle of August that said while prospects for the company still look favorable, it might be a good time to take profits as any downturn in currency volatility could send the shares lower. Barron's also noted another risk in that insiders own a significant stake in FXCM Inc with 69% of the holding units - which are convertible into class A stock. Around the same time, Citigroup analyst William Katz agreed that foreign exchange rates could become less volatile, but then the added that he believes FXCM Inc could report higher than expected 2014 profits if interest rates continue to rise. Otherwise and earlier this month, FXCM Inc reported August retail customer trading volume of $307 billion (21% lower than July 2013 and 13% higher than August 2012) and institutional customer trading volume of $210 billion (14% higher than July 2013 and 320% higher than August 2012). Investors may also want to take a look at the transcript (available on Seeking Alpha here) from the CFO's presentation at last week's Barclays Global Financial Services Conference. On Thursday, small cap FXCM Inc closed at $18.97 (FXCM has a 52 week trading range of $8.53 to $19.97 a share) for a market cap of $721.74 million plus the stock is ip 95.6% since the start of the year, up 93% over the past year and up 26.5% since December 2010.

Gain Capital Holdings Inc. A global provider of online trading services, Gain Capital Holdings businesses include FOREX.com, which provides retail traders around the world access to a variety of global OTC financial markets, including forex, precious metals and CFDs on commodities and indices; GTX, a fully independent FX ECN for hedge funds and institutions; and OEC, an online futures broker. On Tuesday, Gain Capital Holdings reported August retail OTC trading volume of $123.2 billion (a decrease of 13.1% from July 2013 and an increase of 30.9% from August 2012) and total institutional trading volume of $270.4 billion (a decrease of 23.2% from July 2013 and an increase of 66.4% from August 2012). In early August, Gain Capital Holdings reported that net revenues increased 59.7% to $73.0 million, EBITDA rose threefold, EBITDA margin reached 36.8% and net income more than tripled to $17.2 million with the CEO noting:

"We posted another quarter of positive results across all of our key operating metrics, ending the quarter with higher trading activity in our retail and institutional businesses, as well as a record level of client assets. Looking ahead to the remainder of the year, each of our business areas are well positioned to benefit from a continued improvement in market conditions."

On Thursday, small cap Gain Capital Holdings rose 8.57% to $11.15 (GCAP has a 52 week trading range of $3.86 to $11.20 a share) for a market cap of $398.72 million plus the stock is up 178.7% since the start of the year, up 143.4% over the past year and up 31.9% since December 2010.

Indo Global Exchanges PteLtd. Based in Indonesia with its population of 240,000,000, Indo Global Exchanges is one of the more interesting trading platform providers given its focus on the largely untapped Asian markets and its aim to become one of the world's foremost online global trading platforms. Specifically, Indo Global Exchanges provides comprehensive online trading platforms offering the following market access to the clients: Over 30 global equity exchanges for trading in securities; Over 30 global equity exchanges for trading in CFD's (Euro Zone, UK, Japan, Asia, Oceania, Canada and USA); Over 180 currency pairs in spot (Cash), forwards and options; Gold and Silver trading in spot (Cash), forwards and options; Global Commodity Futures exchanges including financial futures; and Indices and Commodity CFD's. The Indo Global Exchange also uses Halifax Investment Services Pty Ltd and Australian Stock Report as its clearing and settling operation in Australia. To further its goal to become a more global trading platform, the Indo Global Exchanges recently announced the appointment of Dermot Michael Monaghan to its Board of Directors. Dermot has extensive experience in the North American and Asian financial markets working in various capacities for the Royal Bank of Canada, RBC Capital Markets, PT Masuka, ABN AMRO (SECS) Asia, Standard Chartered Securities, ING Baring Securities and Cresvale Securities plus he currently resides in Indonesia. On Thursday, Indo Global Exchanges rose 9.09% to $0.660 (IGEX has a 52 week trading range of $0.59 to $0.82 a share) for a market cap of $47.85 million and the stock is up 300% since it started trading in July.

The Bottom Line. If you are an active trader or investor, it might be time to take a closer look at small cap trading platforms like FXCM Inc, Gain Capital Holdings Inc  and Indo Global Exchanges PteLtd.