In-depth Analysis

An evolving online trading landscape

The first known mention of shares’ trading dates back to 390 BC, when citizens of the Roman Republic (which preceded the Roman Empire) received partes (shares) in contracting organizations as a reward for contributing to community efforts. According to texts attributed to the famous orator Cicero, these shares were tradable for money and their value would fluctuate depending on the success of the underlying firms.

As time passed, financial markets became increasingly sophisticated. Fast forwarding to the 14th Century of our era, the Venetian authorities legislated to stop the spreading of rumours that were intended to lower the price of government bonds, in a clear sign of the importance trading already had at the time. The evolution continued at a slow but steady pace and by 1611 the Amsterdam stock exchange, considered the first modern securities trading venue, was established at a roofless courtyard in the Dutch capital.

Today’s financial trading landscape is vastly more sophisticated than its Roman or Dutch renaissance predecessors. Even compared to 20 years ago, when ActivTrades was founded, the 2021 trading scene is practically unrecognizable; gone are the days of it being restricted to a small elite of privileged individuals. Technological and social changes dramatically altered the way the financial markets operate, the levels of interest in the activity and investors’ profile. Today’s decision making and sending of orders relies heavily on sophisticated equipment and fast exchanging of information, with large institutional funds finding themselves competing with crowds of retail traders, that increasingly are able to use similar tools – as was illustrated by the recent GameStop episode.

The COVID pandemic meant that last year was one of the toughest in living memory, due to the economic and social impact of the measures taken to control the virus. However, despite the hardship felt by the underlying economy, financial markets flourished. Despite life almost coming to a standstill, the pace of innovation accelerated in trading, forced by unique conditions generated by the extremely dovish monetary policies of the main central banks, generous fiscal stimulus, the incredible rise of the Tech sector and a record influx of new retail traders.

For a broker like ActivTrades, this evolving trading landscape comes with challenges but also presents incredible opportunities. Over the last 12 months the number of new retail traders grew exponentially, alongside record trading volumes and a constant torrent of requests for new instruments to be added to our offering. Being at the front line of this revolution allowed us to have a unique perspective over the dazzling pace at which the environment is evolving and we believe that we’re at the onset of a golden era for our industry.

The explosion in the number of new retail traders is, to a large extent, a by-product of the lockdown circumstances. As a vast number of individuals started working from home, or were furloughed, they managed to reduce their normal spending while maintaining a steady income. This growth of disposable income and time availability led many to embark on their first trading experience. Another factor that contributed enormously to the growing appeal of online trading is the meteoric rise of famous technology stocks: big names such as Tesla, Apple and amazon, to mention only a few, kept hitting the headlines as their market capitalization grew, supported by the hype of their products and the way our societies suddenly became more dependent on technology.

We believe that in the aftermath of this retail trading revolution things won’t go back to the old normal; the new reality is here to stay. Supported by our own cutting-edge ActivTrader platform, a permanently expanding range of products, very high levels of customer service satisfaction and commission free trading, we feel ready to relish the challenge.

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