Against the backdrop of a global pandemic, the world saw an unexpected consequence: a drastic jump in the number of active retail traders. Central and Eastern Europe (CEE) was no exception. The Polish Financial Supervision Authority (KNF) reported a staggering jump in active Forex market clients, reaching a record of 142,000 by 2022.

Amid this growth, the industry has seen a marked shift towards a diverse range of assets, with a strong interest in stocks, ETFs, and cryptocurrencies. The wheels of change are in motion, rewriting the landscape of the CEE retail trading industry, described in the Finance Magnates Intelligence report.

Record Number of Polish and CEE Traders Invest

According to data from the Polish Financial Supervision Authority (KNF), the number of active Forex market clients in Poland (including both residents and foreign clients of broker companies registered in the country) was just under 39,000 in 2016.

Since then, there has been a continuous increase in active clients, particularly since the onset of the Covid-19 pandemic in 2020. The number of active clients jumped to over 80,000 in 2020, increased to 112,000 in 2021, and exceeded 142,000 in 2022.

"The pandemic and its repercussions are absolutely one of the factors that significantly increased the number of individual investors, up to the record year of 2022 with a number of over 142,000 active traders," Maciej Wojciechowski, the Busines Development & Brand Manager at Purple Trading, originally commented in Polish and was translated to English using DeepL.

Over a span of six years, local retail traders' profits have nearly quintupled: from PLN 141.5 million reported in 2016 to PLN 519.5 million documented in 2022.

The Changing Landscape of Retail Investing

The CEE retail trading industry is experiencing a significant transformation, which is driven by a combination of technology, regulatory measures, changing investor habits, and broader market conditions. Traders in the region are embracing new asset classes, including stocks, ETFs, and cryptocurrencies. Despite these shifts, Forex remains a popular investment vehicle, with currency pairs, commodities, and indices continuing to attract significant interest from retail customers.

In response to this changing demand, brokers like Conotoxia, XTB and Purple Trading are broadening their offerings. For instance, Conotoxia has introduced a capital management service to lower the entry barrier to the advisory market.

Purple Trading has observed an uptick in interest in foreign stocks, likely due to the potential for portfolio diversification and the opportunity to achieve higher profits through global stock market participation.

In the meantime, XTB, the most significant player in the local market, intends to launch a savings account to lure new clients. Omar Arnaout, the CEO of XTB, admitted the vision of the company during a recent earnings conference in April.

Filip Kaczmarzyk, a Member of the XTB Management Board, confirmed in a recent interview with Finance Magnates in Polish and translated to English using DeepL that Poland constitutes the largest FX/CFD market in CEE, the region's biggest country.

"Regarding FX/CFD, we see enormous potential in the Czech Republic. There is evident interest in OTC investing there. However, in Romania, the proportions are slightly different, and there the majority of investors are focusing on stocks and ETFs," Kaczmarzyk commented. A "broker should work on providing the widest possible range of offerings to meet client expectations."

He also confirmed that the interest of local traders is moving away from CFDs to more passive investing opportunities, including stocks and ETFs.

"In 2022, as many as 44% of XTB clients in Poland invested in stocks and ETFs. In Romania, this result was even higher, reaching a staggering 55%. Therefore, we can expect that this trend will continue in the coming months, and even years," Kaczmarzyk explained.

Check Quarterly Industry Report for Full Analysis

Brokers and traders cannot ignore the influence of the Covid-19 pandemic on the CFD/FX industry in Poland and the broader CEE region. The local market analysis examines the growth the industry has experienced over the past six years, with a special focus on the pandemic's role. In addition, you will discover how key brokers, such as XTB and OANDA TMS, have benefited from this expansion.

However, we have only scratched the surface. The complete Quarterly Industry Report delves into these topics and more, offering granular details, expert commentary, and critical analysis of the CEE retail trading industry. Whether you are a seasoned trader, a curious investor, or a broker seeking the latest insights, our report is an indispensable tool.

Check our Quarterly Industry Report for an in-depth look at the exciting yet challenging times ahead, marked by diversification, innovation, and increased regulatory scrutiny in the CEE region.