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Retail investor quarterly trading trends

Analysis of Q3, 2022 trading data from Capital.com.

peter hetherington

CEO, Capital.com

More and more people today are trading on the financial markets with their own money guided by their own insights, thanks to the advent of digital platforms which level up access to the financial markets. The choices made by these everyday retail investors have the potential to offer a real insight into what is becoming an increasingly important global movement.

At Capital.com, our unrivalled database offers a unique window into the behaviour of retail investors, the world’s fastest-growing investor class.

This latest Pulse by Capital.com quarterly report – drawn from the exclusive data contained in our sector-leading trading platform – provides analysts, financial professionals and journalists with a fascinating deep dive into the way the world’s retail investors are thinking.

This quarter, the main themes emerging from the data have been the continuing popularity of short positions among Capital.com traders and the fact that more of our retail investors are choosing to use stop-loss orders. This has risen quarter-on-quarter by 1.4%, confirming that the use of risk management tools is gaining popularity after a steady period of decline between 2019 and 2021. Capital.com’s determined effort to provide improved trader education through guides and videos has clearly gained traction in this area.

For more information about Capital.com and our global community of traders, visit our website’s Media Centre.


Across the markets

Investors can trade more than 6,500 different instruments on Capital.com platform 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 Capital.com’s traders are female, though this proportion varies considerably from location to location.

As of 2022, the Capital.com group reported trading volumes in excess of $772bn.

Highlights from this report

Selected key insights drawn from the trading data in Q3 2022:

Despite the summer stock market rebound, short positions remained popular in Q3 at 39% of trades placed. A hint of caution, however, came with the average trading length for short positions – 9.6 hours – compared with the 44 hours for long positions. The top three shortest-held assets were Nikkei 225 (J225), US Tech 100 (US100) and the Dow Jones Industrial Average (US30).

The popularity of crude oil trading, especially in Europe and the Middle East, grew in the July-September period and made crude oil the most traded instrument of Q3. Investors in Europe and the Middle East led the way in natural gas trading too, which rose in all regions. However, the sentiment for gas may have shifted as most traders (59%) took long positions in Q3.

The total volume of US dollar (DXY) Index trades on Capital.com was up 322% since the start of the year. Retail traders’ view of the dollar’s future changed after sentiment for the DXY in mid-August when the percentage of short trades fell to 29%.

The market volatility of the EUR/USD forex pair came to a head in July when the volume of EUR/USD trades rose 68% in Europe and 90% in the Middle East, pushing the average volume of EUR/USD trades up 13.6% in Q3 compared with Q2.

Equity transaction profitability fell by 11% in August – mainly driven by AMC Entertainment (which lost 60% of its stock value in a market sell-off sparked by rival Cineworld filing for chapter 11 bankruptcy) and the completion of a 3-for-1 stock split for Tesla. In contrast, profitability on currency, commodity and index markets remained stable during Q3.

The responsiveness of retail investors was highlighted in Q3 with the surge in interest with Bed, Bath & Beyond (BBBY). In August alone, our Capital.com platform witnessed an 11,500% increase in BBBY stock trading volume and a 2,345% increase in the number of traders.

Capital.com data trends suggest that retail traders have responded swiftly to world events, switching markets as required to apply their personal insights into the issues.

Turning back the decline in stop-loss orders

A final important aspect to note is the increased use this quarter of a key risk management tool that lets retail investors automatically exit a trade before losses mount up: stop-loss orders.

After a concerted effort with trader education guides and videos, the use of stop-loss orders on our Capital.com platform has risen this quarter – covering 12.3% of trades.

For more on this, see Risk management: Stop-loss order use increases in Q3 below.

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