CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US English

Are women better traders than men? Get the data

By Angelique Ruzicka

09:00, 27 April 2022

Female trader at a desk with market screens
Trading data based on research by Capital.com - Photo: Shutterstock

Fresh research from Capital.com has found that female retail traders are consistently better at stock picking than their male counterparts, even though women make up just 13% of the platform’s trading community.

So, what makes women better at picking winning shares and mitigating investment risk?

Key trading differences

Capital.com’s Pulse study, which analysed emerging trading trends since the start of 2021, found that women think differently to men when it comes to investing. This has proved to be an advantage.

Women tend to prefer short-term trading while men opt for intraday trading. Short term trading involves making fewer trades and holding onto shares for longer, while intraday trading (also known as day trading) often involves buying and selling shares by taking advantage of minute-by-minute or hourly changes in asset prices.

Women also prefer equities and multi-asset trading, while men tend to trade in crypto and currencies. Despite not taking advantage of micro-opportunities, women generally fare better because they tend to invest in sectors and companies that they understand.

Women take fewer risks and have smaller portfolios, which are typically 34% less in size than men’s portfolios. New female traders start with smaller average deposits than new male traders: $226 (£173) vs. $287 (£219). None of this holds female traders back from performing better than men. 

Managing losses

Female traders are more inclined to use short selling strategies. Short selling involves investors borrowing a security and selling it on in the hope that they can buy it back later for less. This is a particularly good strategy to adopt in bear markets (when stock prices are falling).

US100

19,814.20 Price
+1.500% 1D Chg, %
Long position overnight fee -0.0263%
Short position overnight fee 0.0041%
Overnight fee time 21:00 (UTC)
Spread 1.8

BTC/USD

67,793.15 Price
-0.070% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

XRP/USD

0.62 Price
+2.380% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

Gold

2,395.69 Price
-0.210% 1D Chg, %
Long position overnight fee -0.0196%
Short position overnight fee 0.0114%
Overnight fee time 21:00 (UTC)
Spread 0.60

Women are also tactically better at managing the risk of losses, which shows they are more aware of the potential for things to go wrong.

This was demonstrated by Capital.com’s finding that female traders are more likely to put on a bigger stop-loss order and close them manually before the order is traded. However, men set up narrower stop loss orders and are more inclined to move or cancel them, which shows they’re less likely to ‘stick to their guns’.

History of success

Capital.com’s research echo similar findings to other studies that investigated the differences between male and female traders over the years.

A 2021 Fidelity Investments study found that women earned higher returns than men when investing (typically 40 basis points more). Data from Vanguard covering the first quarter of 2020 showed that even though women traded less frequently than men they still got better results.

Overall, female traders outperform men because they are more patient, cautious and disciplined. Their success has also been attributed to their higher financial literacy and education, particularly in Asia. Capital.com found that only 37% of male traders have bachelor or master’s degrees versus 50% of women.

Despite this success, women still lack confidence in their stock picking talents and only a small percentage told Capital.com that they thought they were better investors than men.

Related topics

Rate this article

Related reading

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided in this article is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents and has not been prepared in accordance with the legal requirements designed to promote investment research independence. While the information in this communication, or on which this communication is based, has been obtained from sources that Capital.com believes to be reliable and accurate, it has not undergone independent verification. No representation or warranty, whether expressed or implied, is made as to the accuracy or completeness of any information obtained from third parties. If you rely on the information on this page, then you do so entirely at your own risk.

Still looking for a broker you can trust?

Join the 630,000+ traders worldwide that chose to trade with Capital.com

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading