# Why online retail trading needs an overhaul
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-05-18
Category: TRADING
Category URL: https://financedigest.com/category/trading
Meta Title: The Rise of Retail Trading: The New Generation Investor
Meta Description: Discover the impact of retail stock traders on the global equities market and how new fintech platforms are changing the landscape. Join the 'Generation
URL: https://financedigest.com/why-online-retail-trading-needs-an-overhaulhtml

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_![Joe Jowett, CEO of StrikeX](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/53-1736815713000-compressed.jpg)_

_By **Joe Jowett,** CEO of StrikeX_

Not since the early 2000s’ dot com bubble have we seen retail stock traders rush into the global equities market and with such a high public profile as we have in the last eighteen months. With figures suggesting that roughly 10% of all daily trades globally were by retail traders (reaching almost 25% on the S&P 500) [\[1\]](#_ftn1) and hitting USD $8bn in volume globally in 2021 [\[2\]](#_ftn2), the numbers present a startling picture of this rapidly expanded space. The short squeeze Gamestop saga of early 2021 raised the profile and public perception of retail trading, and it is clear that we have entered a new chapter in the story of non-institutional stock trading.

The retail trader storming of the equity market last year was partly facilitated by fintech trading platforms cutting brokerage commission fees. Driven by the sudden onset of the pandemic in early 2020 and the associated curbs on personal freedom and movement, the [retail market witnessed a significant swelling of individual investors and day](https://www.financedigest.com/valentines-day-spending-boosts-british-retail-sales-in-february-brc.html "Valentine’s Day spending boosts British retail sales in February – BRC") traders. More than 15% of current retail investors only began trading in 2020 [\[3\]](#_ftn3), many in the Millennial cohort and increasingly Gen Z, under 25 bracket, with little or no experience in investing or equities markets.

The boom in [digital retail trading](https://www.financedigest.com/britains-digital-banks-need-support-amid-banking-turmoil-trade-body.html "Britain’s digital banks need support amid banking turmoil – trade body") has meant new platforms have emerged to capitalise on the sector, offering the opportunity to help new investors become part of this ever-growing market. However, many of these allegedly accessible services may be misleading, and are not as [efficient or transparent](https://www.financedigest.com/how-to-create-a-more-efficient-transparent-and-trusted-supply-chain-for-the-gold-jewellery-industry-using-blockchain-technology.html "How to create a more efficient, transparent and trusted supply chain for the gold jewellery industry using blockchain technology") in supporting new customers as they should.

**_The new normal_**

[Online trading](https://www.financedigest.com/whats-in-store-for-2016-leading-online-trading-services-provider-easy-forex-reveals-predictions-for-the-new-year.html "WHAT’S IN STORE FOR 2016? LEADING ONLINE TRADING SERVICES PROVIDER EASY-FOREX REVEALS PREDICTIONS FOR THE NEW YEAR") platforms are opening up opportunities for younger investors to break into the market. Much of the new wave of investors is made up of heavy users of social media platforms, with the median age of retail investors falling from 48 to 35 since the outbreak of the pandemic [\[4\]](#_ftn4).

A different generation means a different outlook, and it was primarily this ‘Generation Investor’ that was behind what happened with GameStop in January 2021: [investors on Reddit created a short squeeze by buying out GameStop stocks](https://www.financedigest.com/uk-stocks-slip-as-rate-hike-worries-grip-investors.html "UK stocks slip as rate hike worries grip investors"), causing short sellers to close with damaging losses, pitting the new Generation Investor against the institutional investors who had bet on GameStop’s decline.

When [trading platforms retaliated by suspending trading of GameStop stocks](https://www.financedigest.com/stocks-fall-treasury-yields-rise-upon-final-2022-trading-day.html "Stocks fall, Treasury yields rise upon final 2022 trading day"), customers lost the ability to trade freely, lost money, and subsequently lost trust in the providers. These platforms were subject to lawsuits and have since faced an uphill battle to win the trust of their customers [back and operate](https://www.financedigest.com/ubisoft-vows-to-get-back-to-operating-margin-above-20-in-medium-term.html "Ubisoft vows to get back to operating margin above 20% in medium term") with a high degree of transparency to fulfil the needs of customers.

The freedom & flexibility blockchain technology inherently provides, offers a solution for online [trading platforms](https://www.financedigest.com/stock-trading-platforms-for-beginners.html "Stock Trading Platforms for Beginners"). Used in transactions around cryptocurrency, NFTs and other [digital assets](https://www.financedigest.com/guide-to-choosing-a-digital-asset-management-system.html "Guide to Choosing a Digital Asset Management System"), a blockchain has both speed, security & accountability. Blockchain transactions are transparent, fully traceable, and free from the added [control & costs](https://www.financedigest.com/dutch-telecom-kpn-locks-in-2023-targets-helped-by-cost-controls.html "Dutch telecom KPN locks in 2023 targets helped by cost controls") of intermediaries as opposed to platforms built on more analogue, legacy technology.

**_Tokenisation_**

NFTs have shown the potential of [tokenising assets](https://www.financedigest.com/britains-post-brexit-asset-management-revamp-eyes-liquidity-tokenisation.html "Britain’s post-Brexit asset management revamp eyes liquidity, tokenisation"), substituting assets for ‘tokens’ that represent ownership of an asset. Using blockchain technology, any asset can be digitised into a token, opening a low cost  and accessible [market to trade](https://www.financedigest.com/the-benefits-of-social-trading-in-a-volatile-market.html "The benefits of social trading in a volatile market") assets over a blockchain network, removing problematic factors such as time and location.

The benefits of tokenisation are clear but are still to be fully harnessed. This technology requires platforms that can offer trading and [investment opportunities](https://www.financedigest.com/private-equity-firms-hungry-for-investment-opportunities-but-business-owners-must-be-cautious-2.html "Private equity firms hungry for investment opportunities, but business owners must be cautious") to a wide customer base.  The [real power of tokenisation lies within its potential to unify and provide access to a diversified](https://www.financedigest.com/u-s-money-reserve-reviews-real-talk-about-diversifying-with-precious-metals.html "U.S. Money Reserve Reviews: Real Talk About Diversifying With Precious Metals") market consisting of stocks, bonds, digital assets, art, real estate, and more. The [platforms capable](https://www.financedigest.com/de-surinaamsche-bank-expands-relationship-with-fiserv-to-upgrade-core-banking-platform-and-add-new-digital-banking-capabilities.html "De Surinaamsche Bank Expands Relationship with Fiserv to Upgrade Core Banking Platform and Add New Digital Banking Capabilities") of achieving this will be essential to transforming the market.

**The [trading platform](https://www.financedigest.com/trade-finance-distribution-platform-tradeteqsecures-us6-3mn-in-seed-extension-funding.html "Trade finance distribution platform Tradeteqsecures US.3mn in seed extension funding") of the future**

StrikeX will launch its flagship product TradeStrike later in 2022, which will offer the ability to trade both tokenised assets and [crypto on the platform](https://www.financedigest.com/meta-to-wind-down-nfts-on-platforms-amid-crypto-bust.html "Meta to wind down NFTs on platforms amid crypto bust"), making it far more cost effective, user friendly and efficient; with 24/7 trading. Giving [control to retail investors](https://www.financedigest.com/cryptoverse-bitcoin-investors-take-control.html "Cryptoverse: Bitcoin investors take control") lies at the heart of tokenisation. [Providing access to the widest possible range of assets with minimal barriers to entry is the primary motivation behind the new TradeStrike platform](https://www.financedigest.com/fico-provides-decisioning-platform-for-smartphone-only-buddybank-in-italy.html "FICO Provides Decisioning Platform for Smartphone-Only buddybank in Italy"). Combining traditional and crypto [markets through tokenisation can democratise the entire financial](https://www.financedigest.com/the-political-wildcard-what-is-trumps-us-presidential-nomination-doing-to-financial-markets.html "The political wildcard: What is Trump’s US presidential nomination doing to financial markets?") ecosystem, making trading and investing a fairer and more inclusive activity. It is fast, secure, accessible, and transparent. It is where the [future of finance](https://www.financedigest.com/enterprise-automation-is-the-future-of-finance.html "Enterprise automation is the future of finance") lies.

Giving ‘Generation [Investor’ the trading](https://www.financedigest.com/how-to-begin-investor-trading-in-australia.html "How to begin investor trading in Australia") platforms they have been asking for is just the first step in the revolutionising of retail trading. Improving the infrastructure of the [market will empower ‘Generation Investor’ to claim the future](https://www.financedigest.com/dry-ice-market-2015-outlook-current-and-future-industry-landscape-analysis-2025.html "Dry Ice Market 2015 Outlook, Current and Future Industry Landscape Analysis 2025") for themselves. StrikeX has the ability to facilitate this.

[\[1\]](#_ftnref1) [https://www.fool.com/investing/how-to-invest/retail-investor/#:~:text=Retail%20investors%20typically%20invest%20in,k)%20or%20other%20retirement%20plan](https://www.fool.com/investing/how-to-invest/retail-investor/#:~:text=Retail%20investors%20typically%20invest%20in,k)%20or%20other%20retirement%20plan).

[\[2\]](#_ftnref2) [https://www.statista.com/statistics/1260026/forecast-global-online-trading-platform-market/](https://www.statista.com/statistics/1260026/forecast-global-online-trading-platform-market/)

[\[3\]](#_ftnref3) [https://www.cnbc.com/2021/04/08/a-large-chunk-of-the-retail-investing-crowd-got-their-start-during-the-pandemic-schwab-survey-shows.html](https://www.cnbc.com/2021/04/08/a-large-chunk-of-the-retail-investing-crowd-got-their-start-during-the-pandemic-schwab-survey-shows.html)

[\[4\]](#_ftnref4) [https://www.marketplacefairness.org/blog/retail-investors-statistics/](https://www.marketplacefairness.org/blog/retail-investors-statistics/)


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