Research reveals big spike in people trading shares during Covid-19 crisis
New research from ETF provider GraniteShares, which offers a range of 3x short and 3x leveraged ETPs on popular UK and US stocks, reveals that since the Coronavirus crisis started, 15.5 per cent of people in the UK who own shares claim to have started buying and selling more, and 3 per cent of the adult population – over 1.5 million people – say they bought some for the first time.
Only 10 per cent of people who own shares say they have been trading them less since the crisis started.
Of those people who started to trade more, 30 per cent said it was because share prices fell dramatically at the start of the crisis, and this presented a good buying opportunity, while 25 per cent said they wanted to take advantage of increased market volatility.
Just over one in five (22 per cent), meanwhile, said it was because there was a period when share prices started to rise dramatically and they didn’t want to miss out on this, while 14 per cent said it was due to the fact that they had been furloughed and had more time on their hands, and 11 per cent said it was because they could no longer bet on sporting events because these had been cancelled.
Lastly and, perhaps somewhat alarmingly, 11 per cent said it was because they had been made redundant and they thought trading shares would be a good way to make money.
In terms of the frequency of share trading since the crisis started, GraniteShares research reveals that 2 per cent of those that have traded shares – some 158,000 people, say they do this on a daily basis, and 4 per cent claim to trade four to five times a week.
Will Rhind, Founder and CEO of GraniteShares, said: “Our research shows that the Covid-19 crisis has resulted in a significant increase in retail investors trading individual stocks. This trend has been fuelled by a combination of factors including increased volatility in the markets, people having more time on their hands as a result of being furloughed, and, in some cases, an alternative to betting on sporting events, which had been cancelled.
“However, investing in shares should always be part of a planned and balanced investment portfolio. For many retail investors a portfolio is likely to consist of a mix of funds, ETFs and potentially some individual stock positions, as well as a cash reserve.
”At GraniteShares, we have certainly seen a pick up in interest from sophisticated investors in the short and leveraged single stocks Exchange Traded Products. Among our exposures to UK blue chips, Rolls-Royce has been the stand out in terms of investor interest, followed by the banks, Barclays and Lloyds Banking Group, and oil majors, BP and Shell. Looking at our new economy exposures to US tech, Tesla both on the long and short side has been the most actively traded, followed by Amazon and Apple.