Before the marvel of the internet – there was a belief that the stock market was a closed shop, open only to those with billion-dollar, deep pockets and ties to the world’s most prominent financial institutions.
It’d be naive to think this wasn’t true, at least to some extent. However, without retail traders and those with tighter budgets looking to put their disposable incomes and savings to good use, stocks, forex, and commodity markets wouldn’t be able to advertise themselves as objectively fair marketplaces.
Many of the big names in finance didn’t anticipate that the rise of mobile trading apps, which would give millions of retail users direct access to the market, could cause such severe volatility and price action. In 2021, the market needed to adjust as retail traders made their way onto the digital trading floor—with collective volumes in the tens of millions of dollars, causing a significant change in traditional methods.
The Arrival Of Retail Traders & Investors
You could make a case that financial institutions should have been better equipped for the mass influx of retail traders. The idea of traders being able to enter the market of their own volition was an idea that has been steadily gathering momentum for many years. It’s not something that suddenly happened overnight.
If we rewind the clock 25 years – it’s easy to see the initial embers of companies using online platforms to cut out the middleman. Online casinos were one of the first sectors to succeed, removing some of the more inconvenient aspects of online gambling and allowing users to play from home without leaving their comfort zone.
Instead of having to travel to a casino, seek out a table, and sit around, sometimes in a busy casino around a bustling table – the whole concept of casino table games became digital. Online casino table games are now such a prominent part of the gambling market that they help to underline just how vast the shift to apps and smartphones has resulted in them becoming the prominent avenue people use for their casino gaming.
Changing Markets & Consumer Preferences
While retail traders and investors have had access to the markets simultaneously, the initial stages of trading and investing online often involve a mediator or a broker. Your point of contact would be the investment company or broker who would take your money, and then they would act as the buffer or the medium to put your money into use.
It wasn’t until the mid-2010s that mobile trading apps provided a better, more direct avenue for traders or investors wanting to try their hand at trading stocks, commodities, crypto, or forex.
The strength of US trading markets has led to the belief that the US dollar has become weaponized because of its immense purchasing power and its role as the world reserve currency.
Now, despite the emergence of a 24/7 marketplace and more international traders having access to stocks – it’s still a 9-5 market, with only a small window of the day seeing the central hub of activity.
Even with the emergence of retail customers looking to trade outside business hours, this disciplined framework is still maintained. Cryptocurrency, on the other hand, has become a 24/7 marketplace. Mobile apps and centralized and decentralized exchanges facilitate the buying and selling of cryptocurrencies for retail traders, giving direct access to a more volatile market.
Final Thoughts
While it’d be a fallacy to suggest that mobile apps have democratized the financial markets and made it an even playing field for those with big money and those who are looking to trade with a slightly smaller portion of their wealth, mobile apps have allowed people who believe they have an eye for trading or to spot a financial opportunity better access to these huge markets.
Multiple stock markets in London, Hong Kong, or New York see trillions of dollars worth of activity within 24 hours. While many of the world’s most prominent banks and investment funds drive a lot of this activity, and more trading is being performed by algorithms more so than old-school style traders – there’s still access to serious profit for those who have a talent for stock trading and have studied it in detail.
Mobile apps have transformed how people trade – breaking down existing barriers, especially those from the pre-internet era. With more people entering these markets, those who have made their living pitting themselves against other top traders in the world have had to adapt and make room for the everyday trader entering the market with their capital.
While this is not advisable for those who don’t have a strong understanding of stocks, there’s no disputing that apps have changed the methodology and approach people take to trading and investing. As our world becomes more mobile-centric, it wouldn’t be surprising to see them grow their influence by facilitating more significant volumes of retail traders.
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This page was last updated on August 27, 2024.
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