Invest
Trading app popularity skyrockets as retail sector booms
In 2021, trading has never been easier for retail investors, meaning the number of users on trading applications has exploded to an all-time high.
Trading app popularity skyrockets as retail sector booms
In 2021, trading has never been easier for retail investors, meaning the number of users on trading applications has exploded to an all-time high.
Data presented by BuyShares.co.uk has shown that the world’s top five trading apps — RobinHood, WeBull, Fidelity Investments, E*Trade and eToro — doubled their user base to reach almost 14 million traders in July.
Of these exchanges, Australians have contributed to the user base of eToro, with the other platforms not available locally. The platform was found to have 1 million users in July globally.
But the most popular trading platform on a global scale was Robinhood, with a peak of over 9 million users in May.
The rise occurred as traders were undeterred by scandals earlier in the year when the platform restricted access to meme stock GameStop.
While not available in Australia, the most popular applications locally are taking notes from the investment giant, with commission-free trading across the US and local stocks becoming increasingly common across Australian brokers including eToro and Stake.
Competitors CMC Markets and IG offer zero commissions on global stocks, while charging a fee for local stocks.
“Stock trading app developers are constantly innovating and adding new features to make portfolio management easier to do on the go,” said Jastra Kranjec of BuyShares.
“For example, many of the latest-gen trading platforms now feature AI-based tools to help users evaluate investment risks.”
With the ease of portfolio management on the go rising, so are the amount of inexperienced or uninformed traders looking to jump on the hype of making quick returns.
This has only been further fuelled by the rise of trading forums such as Wall Street Bets and ASX Bets on Reddit, where traders compare their experiences, and boasting of high returns is commonplace.
More and more, there is a growing sense of FOMO from prospective investors, keen to get the money off the sidelines without adequate consideration for the risks involved.
ASIC recently highlighted how brokerages following the Robinhood model have targeted this, telling prospective traders “don’t believe the hype” and that adequate research should be conducted before any trade.
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