Flow Traders Q3: A Test of the Compounding Thesis?
Lower volatility hits profits as expected, but balance sheet growth and new credit facilities increase trading capital for future volatility events.
Disclaimer: I own shares of Flow Traders Ltd. and may benefit if the price of these shares rises. I may decide to purchase or sell shares at any time without prior notice. Do your own research and size positions appropriately if you invest. Nothing here is meant to be understood as investment or financial advice. AI tools assist my research and writing process, enhancing analytical efficiency and clarity.
TL;DR
Flow Traders’ Q3 results were soft as expected, due to low market volatility, confirming the guidance from the September pre-close call.
The market’s negative reaction (-7% share price) overlooks the core thesis: Shareholder Equity grew to a new record, and Trading Capital is now over €1bn with new credit facilities.
The investment case remains intact, but now hinges on management’s ability to effectively deploy its expanded >€1bn capital base when volatility inevitably returns.
Introduction
Flow Traders’ third-quarter update tests investors: do you focus on the cyclical, volatile earnings of a market maker, the secular growth of its underlying capital base, or the mega-tailwinds for digitized ETP trading?
Flow Traders’ Q3 2025 was the first quarter under new CEO’s Thomas Spitz’s lead. Based on the quarter’s pre-close call of September 25th (see source 3), the market should have known already that the quarter would be on the softer side. Nonetheless, Mr Market sent Flow Traders’ shares down -7% at the time of writing. Was it really this bad?
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