Capital.com has published data and insights on its CFD turnover, which reveal that the regional banking crisis, seen in the first quarter of 2023, drew retail traders into the CFD market.
Banks down, brokers up…
Capital.com publishes quarterly trading highlights and other information in the Pulse report.
The latest release of which shows that CFDs on SVB, or Silicon Valley Bank underwent a surge in trading during Q1 2023. With CFD volumes, in the now defunct stock, rising by 8000%, quarter over quarter. Whilst CFD trade volumes in troubled European lender Credit Suisse, jumped by more than 9600% in the first three months of 2023.
Impressive as those gains were, they paled into insignificance beside the 314,000% increase in activity in CFDs over First Republic Bank (FRC)
Capital.com’s clients traded long and short in these banking names as their share prices swung dramatically, as investor sentiment moved from bearish to bullish and back again. Silicon Valley Bank ultimately collapsed as it underwent a liquidity squeeze. Whilst Credit Suisse and First Republic were rescued by takeovers by UBS and JP Morgan respectively.
- Related: Read our expert capital.com review
US stocks remain the most popular for CFD traders
Despite the sharp jumps in trading volumes, the shares of troubled regional banks were not the most actively traded equity instruments at Capital.com during the first quarter of 2023.
That distinction belongs to EV manufacturer Telsa (TSLA) which was in pole position in the lists of the most actively traded long, and short CFD contracts.
A statistic, which highlights the marmite attitude of investors towards the stock, and one that we imagine was very profitable for the broker which should thrive on solid two way flow.
Tesla has held the most actively traded accolade for the last four quarters, other names which captured the attention and imagination of CFD traders at Capital.com included Bed Bath & Beyond (BBBY), Amazon (AMZN), Nvidia (NVDA) and Apple (AAPL).
Graphics chip manufacturer Nvidia saw its stock price make gains of 90% during Q1 2023, whilst Apple shares rose by just under 30% over that time frame.
Index trading on tech
The Nasdaq 100 index was the most actively traded index in the first quarter and drew interest from clients of all of the firm’s regional offices.
Away from the equity markets crude Oil and natural gas were among the most actively traded commodities among Capital.com clients and there notable increase in open interest among assets that are rate sensitive, such as forex pairs and gold.
Notional trading volumes at Capital.com exceeded $300 billion, a 12% gain over the final quarter of 2022.
The biggest growth came from the Middle East and Australia which saw 40.8 and 53.8% improvements in turnover, respectively, when compared to the prior quarter’s data.
It’s always interesting to gain an insight into the minds and habits of retail traders and to get a feel for the turnover at leading brokers. What stands out most to me is the absence of any UK names in the most traded lists, which highlights the global nature of modern CFD trading and also the lack of exciting stories and stocks within the UK markets. And that’s something for city regulators to think long and hard about.