Trading platforms have reported record profits as more people stuck at home during lockdowns took a gamble on the stock markets.
Retail trading has boomed since the Covid pandemic began. ATFX, IG Group and CMC Markets all reported a dramatic increase in client numbers this year.
FTSE 250 trading platform IG Group’s active customer base is up by 43 per cent from the same time last year. Their revenue rose by 66 per cent to £416m for the six months to the end of November.
Similarly CMC Markets, who allow leveraged trading on thousands of markets, saw the number of active clients increase by 42 per cent in the six months to the end of September. Their profits before tax rose by 369 per cent in this period.
At the start of the pandemic in March, the Degiro platform had to create a temporary waiting list for new clients due to a spike in registrations.
This has been a global trend. Bloomberg Intelligence found that in the US, retail trading now makes up 20 per cent of U.S. stock orders, making them the second-largest group of investors.
Gen Z and Millennial investors were the major drivers of the increase in day trading. 51 per cent of investors under the age of 34 are trading more frequently, compared to 30 per cent of the general population, a report by E*Trade found in August.
According to the report, over half of this age category said their risk tolerance has increased since the coronavirus outbreak.
Trading platform ATFX said that volatile markets have “created lots more trading opportunities for short-term traders”, in their Impact of Covid-19 on ATFX Operations report. They also said that they witnessed increased activity across FX, commodities, stock and index CFDs and futures products.