AJ Bell and IG Group are just two examples of investment platform providers that let people trade currencies and financial instruments online and have both reported a surge in trading activity during Covid-19.
AJ Bell suggestd that between April and June: “new customers rose by 8% and retail customers rose by 12%". Total assets under management stand at £54.3 billion. In addition, over the last 3 months trades placed by customers more than doubled from same time last year.
IG Group, during at the start of coronavirus lockdown had over 1 million trades placed on its platform each day in March compared to 336,000 this time last year. At the end of the financial year 31st May 2020. IG’s revenue had rose to £649.2 million a rise of 36%, with pre-tax profit up by 52% to £295.9 million.
In the US during the pandemic, there has also been a boom in the retail trading and is thought the amateur investors were blamed for a jump in the stock of bust car rental company Hertz.
Critics say trading is more addictive than gambling and some of the marketing activity is irresponsible and reckless. We have to agree.
We too have been testing some spread bet, forex, commodities and indices trading platforms. On the downside, we have been continually hounded by their sales teams every week to trade more. That said, we have found it enjoyable but indeed, it is addictive. Given our modest expertise, we have made money very quickly but, as the caveat warnings suggest on many sites, 75% to 80% of investors lose money - so if you have no experience, do not invest in this way, it would literally be gambling.