Ahmed Khawanky of INGOT Brokers explains how, amid the uncertainty of Covid, online trading is providing a valuable alternative income stream
Historically, trading in the financial markets was generally regarded as a specialist occupation, and even amid the most expansive of economic cycles, most people rarely had the means or drive to get involved. But now, the global pandemic and the rise of new technology has created a shift in accessibility to the financial markets. The pandemic has given birth to a new era of traders from all backgrounds and financial capabilities.
Covid-19 has impacted people around the world. The lack of job security has pushed people to search for other ways to secure an income, and at the same time, lockdown has given them more time to become educated in the financial markets.
Market changes during 2020/21
The CBOE Volatility Index, which measures expected volatility in equity markets, reached its highest level in May of 2020 since the height of the global financial crisis. However this time, markets were shaping one of the most profitable trends in recent history. The total value of global equity trading reached a remarkable $137.64tn during 2020, compared to pre-pandemic levels of $88.91tn in 2019, $97.32tn in 2018, and $94.25tn in 2017.
In just the first quarter of 2021, the global economy has already contended with multiple price swings, owing to the end of the Brexit transition period, the US elections, as well as an army of retail traders going after the most shorted stocks on Wall Street to drive up prices and pile up more wealth – such as GameStop – driven predominantly by a community of Reddit users. Other than equities, which were generally seen as risky assets, 2021’s major attraction was the rise of cryptocurrencies, a much more volatile opportunity. April 2021 saw cryptocurrency market value rise to $2tn for the first time. We are not only talking about bitcoin here, but hundreds of low-price entry cryptos that became more available through online trading websites and mobile apps.
Current market sentiment
At INGOT Brokers, our client behaviour and sentiment suggest that they are positioned to continue taking advantage of the current environment. One thing we have noticed is that our clients have shown an appetite for assets that were once considered exotic.