GraniteShares ETP : The cost of living squeeze and worries about volatility are forcing retail share traders to cut back on trading or not trade at all
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Will Rhind, Founder and CEO at GraniteShares ETP
- More than one in three have cut back on trading or not invested at all in the past year
- Interest rate rises are tempting traders back to cash
More than one in three (34%) retail share traders have cut back how much they trade or not traded at all in the past year highlighting how the UK’s army of retail share traders are reacting to current market conditions, the study found.
The main reason behind the drop in share trading is volatility – 60% say it makes trading too risky while nearly half (48%) say the cost of living squeeze makes buying and selling shares too expensive. Just 17% say they have cut back because they have lost money.
The research for GraniteShares, which offers UK sophisticated investors a suite of index ETPs tracking FAANG stocks and a suite of Short and Leveraged Single Stock Daily ETPs tracking some of the most popular companies in UK markets, identified another factor – rising interest rates
Around 60% of retail share traders say rising rates have convinced them to put more money into savings accounts.
Not all are cutting back – GraniteShares’ research found 31% have increased their level of trading or started trading for the first time in the past year, while 35% say their level of trading has remained the same.
Among those increasing share trading or investing for the first time volatility is the main driver – 37% say it offers more opportunities to make money while a third (34%) see it as a way to make extra cash to ease cost of living pressures.
Around two out of five (42%) of retail share traders are trading up to five times a month while around 4% are trading 20 times or more, the research shows. Around 40% are not sure how often they trade a month.
Will Rhind, Founder and CEO at GraniteShares said: “The COVID-19 pandemic saw a surge in people taking up share trading as they had the time to do this due to lockdowns, and to some extent the cash to invest in trading.
“It is perhaps inevitable that trading has tailed off a bit this year with the cost of living squeeze also hitting home. But it is clear that share trading remains a major focus for millions of people and that while volatility scares some retail share traders, it encourages others to spot potential money making opportunities”.
“That has also been our experience and we have seen a growing number of sophisticated investors in the UK who see opportunities from volatility. That is reflected in the demand for products such as short and long ETPs which provide the flexibility needed to help navigate volatile market swings on both the long and short sides.”
Source: ETFWorld.co.uk
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