eToro has exclusively told the Good Money Guide, that natural gas, has rarely been outside of its top ten most actively traded instruments, since September 2021, prior to which it barely featured at all.
What was behind the revenue growth at eToro?
According to documents filed at companies house, the broker reported revenue growth of more than $200 million or around £181.20 million, and it posted pretax profits just below $4.0 million, or £2.90million.
That revenue growth was attributed to a significant increase in the number of active UK clients, particularly those who want to trade the markets via a socialised platform, where they can swap ideas and talk to fellow traders.
eToro’s UK registered users numbers rose to 3.20 million by August 2022, and they now account for more than 10% of the firm’s global client base. The growth in client numbers and revenue has come at a time when traditional markets have been under pressure.
Leading equity indices, particularly those exposed to technology and growth have suffered an almost -40% fall year to date, whilst the Global Dow, which tracks the performance of stocks around the world has fallen by just over -22% in 2022 so far.
So what have eToro clients been trading instead?
eToro‘s UK clients are seemingly undeterred by those numbers and have also been quick to embrace other asset classes.
eToro has long been associated with retail crypto trading, dealing in physical coins, rather than derivatives. Which, of course, are off-limits to private investors in the UK and Europe.
However, it’s not just cryptocurrencies that have caught the attention of the firm’s UK client base. Commodities and in particular, the energy markets have also proved popular.
Natural gas has become a mainstay among UK traders, something that the MD of eToro’s UK operations, Dan Moczulski, puts down to the fact that gas prices are often in the headlines.
How active have eToro’s UK traders been?
US natural gas has risen by some +18.0% over the last year. However it has been overshadowed by the price gains seen in both UK and European gas contracts, with UK natural gas prices jumping by +35.80%, and Dutch TTF gas, the European benchmark rising by +87.10% in the last 52 weeks.
Gas prices rose as Russia invaded Ukraine, and the western powers sanctioned Russian exports, of which oil and gas are a major part.
As a result, natural gas was one of the most actively traded instruments at eToro during August. However, the interest in gas among retail traders goes back much further.