United Kingdom - May 31, 2022 —
Forex Broker Listing is an independent forex-related website from the United Kingdom on a mission to make accurate information about forex brokers and forex trading more accessible across the globe.
Covid has been a boon to online trading around the world. According to a Bloomberg Intelligence research, online retail traders account for more than 20% of all US stock order volume. This is because stay-at-home workers are looking for ways to supplement their incomes.
“The pandemic, meme stocks, cryptocurrencies, and geopolitical tensions have all played a part in more people wanting to learn and participate in trading financial markets“, says Chad Smith, Director of Research and Analysis at forexbrokerlisting.com. "A lot more traders signed up because potential trading and investment opportunities to support incomes are now more visible than ever."
The average retail equity-volume target has increased three percentage points to 23% from the previous market. This confirms the influence of day traders, as institutions relax. However, the 55% increase in U.S. volume for 2020 compared to 2019 was fueled by COVID-19-induced volatility and no-fee trades among many catalysts. These elements could slow down as 2021 progresses.
Based on the calculations of forexbrokerlisting.com experts, the recent volume surge led GameStop Entertainment and AMC Entertainment to have boosted retail investor participation up to 23% of U.S. Equity trading from 20% in 2020. The massive increase in retail trading of "meme" stocks made popular through social media is reflected in over-the-counter (OTC) volume, benefiting the four largest wholesalers (Citadel Securities, Virtu Financial, G1 Execution/Susquehanna, and Two Sigma Securities) and order-flow payments.
Although interest in meme stocks is likely to dwindle and decrease the company’s retail-share forecast for the year, the GameStop/AMC frenzy confirms that retail accounts for an ever-increasing share of U.S equity-share volume.
U.S. equity share volume increased 55% year-over-year in 2020, but value traded only increased 49%. This is due to a retail preference toward lower-priced stocks than traditional institutions can often touch. Although the six percentage points gaps might seem small, they show the increasing influence of retail investors. Covid-19 disruptions forced many to reallocate their positions, created a new generation of day traders, and increased the activity of more experienced traders.
CFD and Forex Brokers are also making moves to ensure they have the best chance of gaining a competitive edge and the largest share of the market.
Over the past year, a swarm of mom-and-pop investors has flooded the financial markets. Retail investors have been buying everything, from Bitcoin to call options to meme stocks, thanks to low-interest rates and thousands of dollars in stimulus funds. Bloomberg Intelligence data shows that 20% of U.S. equity trades in 2020 could be traced back to retail investors. This number was 22% in the second quarter of 2021.
Although incumbents have seen significant growth, the most important beneficiaries of the rush to the market have been younger platforms that allow investors to sell and buy assets using their smartphones.
Retail investors are more likely to trade stocks at lower prices because they believe there is a greater upside and can accumulate larger positions. Brokers allow clients to sign up quickly and test different trading strategies with a demo account before they commit real money. Clients have the ability to trade any type of derivative, also known as contracts-for-different (CFDs), that gives them the benefit of the underlying price movement of a financial asset without having to take on the risks and hustle. You can benefit from any price movement in Tesla's underlying stock by buying a CFD.
More information about forexbrokerlisting.com is available on the company’s official website.
Contact Info:
Name: Chad Smith
Email: Send Email
Organization: ForexBrokerListing.com
Address: United Kingdom
Website: https://forexbrokerlisting.com
Release ID: 89075892
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