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Retail-investor quarterly trading trends

Analysis of Q2, 2022 trading data from Capital.com.

peter hetherington

CEO, Capital.com

“Retail investing has become an increasingly important phenomenon across the global financial markets in recent times, as digital platforms have lowered barriers to entry. It is now easier than ever before for ordinary people to trade the markets and act on their own insights and analysis.

The meme-stock phenomenon of 2021 has shown that even the biggest and best-funded institutional investors need to keep themselves informed on trends and thinking among retail investors. Today, the world is in turmoil as the consequences of the war in Ukraine continue to unfold, the aftermath of the pandemic plays out and inflationary shocks strike economies around the world. Traders are changing their behaviour in response.

At Capital.com, we have an unrivalled database covering the behaviour of the world’s fastest-growing investor class.

This Capital Pulse quarterly report is based on proprietary data drawn from our sector-leading trading platform. I believe it offers a valuable resource for financial professionals, analysts, journalists and indeed anyone seeking an insight into what the trends are among our huge global community of retail investors.

The main theme emerging from the data this quarter has been a rise in the popularity of short positions among Capital.com traders. Most investors and traders are hardwired to "go long" when it comes to markets: buy first and look to sell hopefully higher and make a profit. Although retail traders have the ability to "short-sell" (taking profit from falling markets), historically it is not something that many have done. The sharp rise in clients short-selling over the current quarter demonstrates just how significant the drop in many markets has been, forcing many retail traders to change their mindset.

Readers who would like more information about Capital.com and our traders should visit our website’s Media Centre.”


Across the markets

The Capital.com platform permits investors to trade more than 6,100 different instruments across many different markets: stocks and shares, exchange-traded funds, currencies, cryptocurrencies, commodities and indices. Capital.com has group entities located in the UK, Cyprus and Australia that are authorised and regulated by the Financial Conduct Authority, the Cyprus Securities and Exchange Commission and the Australian Securities and Investments Commission respectively.

Traders around the world

More than three million people have applied for an account with the Capital.com group.

Some 13% of traders are female, though this proportion varies considerably with location.

In 2021, the Capital.com group reported trading volumes in excess of $560bn.

The UK is the number one country on Capital.com by number of trades, which is up by 18% since Q1. The number one country by volume of trade is the United Arab Emirates, beating the UK which was number one for volume in Q1.

Highlights from this report

Selected key insights drawn from the trading data in Q2 2022:

Short positions became increasingly popular on Capital.com in Q2, and were more profitable for traders. The highest proportion of short trades was seen in the UK, Africa and Asia (41%). The lowest proportion of short trades was seen in Australia (34%), though this was increased from Q1. Forex was the most heavily shorted market.

The mass influx of traders into crude oil seen in Q1 was followed by an almost equally rapid exodus in Q2. Natural gas, which also saw a large Q1 influx, remained popular.

The Nasdaq 100 index was the most traded asset for the second quarter, with traders shifting increasingly towards short positions, looking to profit from a falling market.

The Amazon (AMZN) CFD was hugely popular with traders during Q2. The company’s stock split on 6 June saw a 1302% increase in traders and it was the only tech stock to see an increase in long positions, up by 110%. However, short positions in AMZN were more profitable than long ones.

Capital.com chief analyst David Jones comments:

There are a couple of reasons why Amazon may have increased in popularity. First, the stock is down 40% since November — so some may think the effect of consumers reining in spending may already be factored into the price. Secondly, Amazon also had a 20-for-1 stock split this quarter, which is often a way of making a relatively high priced stock attractive to smaller investors.

The Nasdaq 100 (US100) index is the most popular instrument in 5 regions

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