Spectrum Markets reported a significant surge in after-hours trading activity for August 2024, reaching its highest level since November 2022. The pan-European trading venue for securitized derivatives saw 38.7% of trades occurring outside traditional market hours, reflecting a growing appetite among retail investors for round-the-clock market access.

Spectrum Markets Sees Record After-Hours Trading in August 2024

The Frankfurt-based multilateral trading facility (MTF), which offers 24/5 trading to retail investors across Europe, has been monitoring a steady increase in demand for extended trading hours since its launch in August 2019. This latest data point underscores the platform's success in meeting the evolving needs of European retail traders.

For comparison, in November last year, 32.3% of all transactions occurred in after-hours trading, which is more than 6 percentage points less than currently.

Michael Hall, Head of Distribution at Spectrum Markets, attributed the spike in after-hours trading to “significant market-sensitive events that triggered spikes in volatility” during August. This increased volatility appears to have driven investors to seek more flexible trading options.

Two months ago, the European trading venue for retail investors also published its H1 2024 business update, revealing a mixed performance amid more challenging market conditions. For example, it reported a 15% volume decline compared to the same period a year earlier. Spectrum reached a turnover of $1.5 billion, $200 million lower than in H1 2023.

Despite the downturn, Spectrum Markets demonstrated some resilience and extended its product range to include approximately 1,800 ETFs. Although Spectrum's results for the first half of 2024 indicate a downturn compared to the previous year, it's important to recognize that 2023 was an exceptionally strong year for the company.

Retail Investors Turn Bearish

Spectrum's proprietary SERIX sentiment indicator revealed a bearish shift in investor outlook, particularly towards the French CAC 40 index. The SERIX value for the CAC 40 dropped from a neutral 100 in July to a bearish 93 in August, reflecting growing caution among retail investors towards the French economy in the post-Olympics period.

“Our bearish investor sentiment index indicates a degree of pessimism among retail investors, as the attention switched back to politics. After the heightened political uncertainty caused by President Macron’s call for a snap election in June, the upcoming Olympics worked as a distraction to investors’ concerns,” added Hall.

Trading Volume, Distribution, and Top Traded Markets

While the surge in after-hours trading was a standout feature, Spectrum's August data revealed other noteworthy trends.

The total order book turnover for August 2024 reached €306.3 million. The distribution of trades across asset classes showed a strong preference for indices, accounting for 82.2% of the turnover. This was followed by commodities at 7.4%, equities at 4.5%, cryptocurrencies at 3.1%, and currency pairs at 2.8%.

The NASDAQ 100 led as the most traded underlying market, representing 34.3% of trades. It was followed by the DAX 40 at 26.6% and the DOW 30 at 11.4%.

In a move to strengthen its industry position, Spectrum Markets became a member of the German Federal Association of Investment Firms during the first half of 2024.