The apogee of gamification and retail speculation can still change the whole industry.
The widespread introduction of a commission-free stock trading model in 2019 has completely transformed the retail investment industry in the US and globally, while the 2020 Coronavirus pandemic and lockdowns have only exacerbated the phenomenon. However, the apogee of gamification and retail speculation came in early 2021 with the unprecedented situation surrounding publicly-listed gaming retailer, GameStop (GME).
Robinhood Set the Game Rules of Commission-Free Stock Trading
Finance Magnates Intelligence Department looks at the changes that have taken place in the market through the boom in popularity of commission-free trading and how things look after the GME turmoil. We spoke to industry representatives, asking them whether the GameStop speculation has affected their businesses.
In 2020, platforms that enable quick and easy trading from mobile devices broke records in popularity. Robinhood, among others, served more than 13 million users. In comparison, five years earlier, the value was 26 times lower and oscillated around 500 thousand active accounts.
Before Robinhood came out in 2014, anyone who wanted to invest in stocks had to pay between $5 and $10 for a single trade. Additionally, many brokerages were required to have at least $500 to open the most basic account. Robinhood eventually started a significant shift in the market. On one hand, seeing its growing popularity, large brokerages such as E*Trade, Interactive Brokers, TD Ameritrade and Charles Schwab started lowering their trading costs (eventually switching to a commission model). On the other hand, more platforms similar to Robinhood (Public.com, Webull, SoFi, Tradier, TradeZero, Freetrade, BUX and many more) started appearing in the market.
Although the average traditional investor profile worldwide continues unabated (a male with secondary or tertiary education, 40 years old or more), on commission-free platforms, they look different. Younger investors dominate them, and the older ones are just beginning to discover hidden opportunities. “The median age of an eToro investor globally is 34, but we are seeing the proportion of clients over 40 years old increasing year on year, too”, said Gil Shapira, Chief Investment Officer at eToro.
GameStop Mania Fired the Imagination of Retail Investors
The GameStop frenzy caught the imagination of traders, who began to look for more opportunities for massive retail purchases by attempting to drive up the prices of gold, AMC Entertainment Holdings (AMC), or Dogecoin (DOGE) in a similar way. More people wanted to join the buying mania and the seemingly easy money, which triggered a massive increase in new registrations. As Finance Magnates reported back in January, the GME frenzy prompted a surge in the New York-based online broker-dealers, TradeZero America that had new clients signup more than 200 times compared to the previous year.
“Based on the decision by many brokers to stop opening buys, combined with Dave Portnoy’s calling them to task while also advising that GME and others could be traded with TradeZero, was a powerful one-two punch on Jan 28th, 2021,” said Dan Pipitone, Co-Founder of TradeZero America. “It dramatically increased registrations of new accounts, new deposits and spurred on large increases in trading. Our new account numbers were up over 200.”
According to Yorick Naeff, CEO at BUX, the mania around GameStop “was indeed an event that was lived by the entire market.” During these volatile market moments, the company noticed an increase in new customer inflow, looking for short-term gains. “It, however, didn’t affect our business; the BUX Zero app kept working as it should. We have our own state-of-the-art full-stack system that allows us the flexibility to deal with significant swings of market Volatility”, said Mr. Naeff.
To get the full article and the bigger picture on the future of Commission-Free stock trading, get our latest Quarterly Intelligence Report.
The widespread introduction of a commission-free stock trading model in 2019 has completely transformed the retail investment industry in the US and globally, while the 2020 Coronavirus pandemic and lockdowns have only exacerbated the phenomenon. However, the apogee of gamification and retail speculation came in early 2021 with the unprecedented situation surrounding publicly-listed gaming retailer, GameStop (GME).
Robinhood Set the Game Rules of Commission-Free Stock Trading
Finance Magnates Intelligence Department looks at the changes that have taken place in the market through the boom in popularity of commission-free trading and how things look after the GME turmoil. We spoke to industry representatives, asking them whether the GameStop speculation has affected their businesses.
In 2020, platforms that enable quick and easy trading from mobile devices broke records in popularity. Robinhood, among others, served more than 13 million users. In comparison, five years earlier, the value was 26 times lower and oscillated around 500 thousand active accounts.
Before Robinhood came out in 2014, anyone who wanted to invest in stocks had to pay between $5 and $10 for a single trade. Additionally, many brokerages were required to have at least $500 to open the most basic account. Robinhood eventually started a significant shift in the market. On one hand, seeing its growing popularity, large brokerages such as E*Trade, Interactive Brokers, TD Ameritrade and Charles Schwab started lowering their trading costs (eventually switching to a commission model). On the other hand, more platforms similar to Robinhood (Public.com, Webull, SoFi, Tradier, TradeZero, Freetrade, BUX and many more) started appearing in the market.
Although the average traditional investor profile worldwide continues unabated (a male with secondary or tertiary education, 40 years old or more), on commission-free platforms, they look different. Younger investors dominate them, and the older ones are just beginning to discover hidden opportunities. “The median age of an eToro investor globally is 34, but we are seeing the proportion of clients over 40 years old increasing year on year, too”, said Gil Shapira, Chief Investment Officer at eToro.
GameStop Mania Fired the Imagination of Retail Investors
The GameStop frenzy caught the imagination of traders, who began to look for more opportunities for massive retail purchases by attempting to drive up the prices of gold, AMC Entertainment Holdings (AMC), or Dogecoin (DOGE) in a similar way. More people wanted to join the buying mania and the seemingly easy money, which triggered a massive increase in new registrations. As Finance Magnates reported back in January, the GME frenzy prompted a surge in the New York-based online broker-dealers, TradeZero America that had new clients signup more than 200 times compared to the previous year.
“Based on the decision by many brokers to stop opening buys, combined with Dave Portnoy’s calling them to task while also advising that GME and others could be traded with TradeZero, was a powerful one-two punch on Jan 28th, 2021,” said Dan Pipitone, Co-Founder of TradeZero America. “It dramatically increased registrations of new accounts, new deposits and spurred on large increases in trading. Our new account numbers were up over 200.”
According to Yorick Naeff, CEO at BUX, the mania around GameStop “was indeed an event that was lived by the entire market.” During these volatile market moments, the company noticed an increase in new customer inflow, looking for short-term gains. “It, however, didn’t affect our business; the BUX Zero app kept working as it should. We have our own state-of-the-art full-stack system that allows us the flexibility to deal with significant swings of market Volatility”, said Mr. Naeff.
To get the full article and the bigger picture on the future of Commission-Free stock trading, get our latest Quarterly Intelligence Report.
A graduate of the Warsaw School of Economics, Sylwester received an MA specializing in finance and banking. As Finance Magnates' research associate and STA certified analyst, he leaves no stone unturned. Sylwester is the previous minority partner of an NFA registered US forex broker, and since 2003, has participated in many forex projects.
58% of UK Investors Choose Professional Guidance over 'Finfluencers’
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
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#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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