Coronavirus has affected the whole world in some way or the other, and the financial sector is no exception. In present times, the volatile trading market is going through a lot of ups and downs.

Aussie trading app Stake was recently launched in New Zealand and the UK. The platform has since then witnessed trades worth more than $250 million. By March, the volume increased more than nine times than that of December. Customers are now investing more money per trade and the average trade size has also doubled in the recent months. With the great results, other trading apps like Trade Republic and Robinhood have also raised significantly large funding rounds. However, while March boomed for Stake, a drop off was observed in April. It was still higher than December and January though.

The market was rebounding at 11% roughly this month, but the oil price collapsed below zero in the second half of April and the Dow was closed at 2.4% lower, which was even worse than the first of April. Many customers reverted to investing in big technology firms in the US before this happened. They went for Tesla, Microsoft, and Apple, over inverse ETFs.

Analysing the Trading Market

Analysing the trading market is difficult due to its ever-changing climate and short-lived reactionary statements. However, while coronavirus is concerned, experts are thinking that big trading volumes may indicate a new generation of investors in today’s trading market. The trade volume growth is extraordinary, and there have been 20,000 new sign ups welcomed by Stake this year. So, the new propositions are expected to be interesting.

In July, Stake is set to officially roll out its brokerage packs, which so far was available for free for users to try. This three tier offering, the first of which is free, further aims to diversify the platform, making it easier for novice traders to start out with fractional shares, as well as for seasoned investors who trade on settled funds.

After the $67 million investment announcement was made, Trade Republic stated that it was set to release a series of saving features over the span of the coming months. The fact that Trade Republic has focused on saving features has raised many eyebrows among the various wealthtechs. They have till date, firmly defined their offerings as the “safer, long-term option” compared to other “game-playing” trading apps.

The combination of long-term portfolio offerings and quick-win investments can lead the path towards further consolidation in the fintech sector. This phenomenon has already been seen in infrastructure providers and Fintechs buy bank.

In the immediate economic climate, the prospect of rolling out saving products could reap some quick gains as competitors in some countries take a big step back.  There were about 180 saving products pulled from the market in the UK between the beginning of March and April this year.

For instance, Canadian based Fintech Wealthsimple has seen less than 5% of its customers modify their portfolios during the coronavirus uncertainty. It also has a trade offering in Canada, which makes it another player which aims at bridging the gap between long term investments and trading. The Fintech company has acquired over 7000 new users on average per week, with half of them being under the age of 34.

However, Deloitte’s director Alexander reminds everyone that Fintechs were struggling to get attention from prospective customers before this pandemic induced surge. Thus, it is difficult to gauge how well trading Fintechs have done during this pandemic, until the lockdown ends and economies around the world recover. As such there are many users joining Online Broker such as IQ Option, to reap the benefits of this “Coronavirus” surge.

Thus, in the short-term, there are many trading Fintechs which are currently doing very well, due to the reactionary nature of the market. These can change however as old challenges start to creep back in, in the Post-coronavirus period.

This entry was posted on Tuesday, May 26th, 2020 at 5:00 pm and is filed under Online Trading. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.