Younger overseas investors are ignoring domestic shares in favour of the U.S. Most of these are household names and with a virtual halt on other forms of betting due to the pandemic, some retail punters are increasingly betting on US stocks,” said the head of trading at a U.S. “We are seeing an increase of retail investors outside the U.S. stocks rather than companies closer to home, bank and brokerage sources said. Many investors in Europe caught up in the hype are more focused on U.S. Treasury Secretary Janet Yellen has said regulators must keep a close watch.Įuropean Union regulators have also said they may intervene after a surge in online share trading by retail investors since restrictions to tackle the COVID-19 pandemic were introduced. Many of those late to the party have lost heavily as GameStop’s stock crashed to as low as $51 last week after hitting $483 the week before, and U.S. Reddit-fuelled stock craze has lit the touchpaper, he said. The surging interest in stock investing is also due to macroeconomic factors in continental Europe, including rock-bottom interest rates, high house prices and inadequate pension systems, said Nick Bortot, co-CEO of Amsterdam-based digital broker BUX. The Reddit stock mania has galvanised a retail trading boom that was already underway in Europe in 2020, as bored housebound punters saving extra money tried to cash in on market volatility, and new user-friendly apps gave them the means. “When investors become so excited about the potential for a particular stock or asset class, the story can sometimes move from the world of financial news to the mainstream,” said Adam Dodds, chief executive of Freetrade. Younger investors in Britain and other countries are fast joining online trading platforms and spending more on shares at traditional brokerages, hoping to copy Americans who bet on stocks such as GameStop and AMC Entertainment during the frenzy this year.īritish-based online trading platform Freetrade signed up over 160,000 customers in January, pushing it past 500,000 in total, thanks to the hype around the so-called Reddit rally stocks, Freetrade told Reuters. REUTERS/Dado Ruvic/Illustration/File Photo FILE PHOTO: Reddit logos are seen displayed in this illustration taken February 2, 2021.
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