Regardless of whether you’ve been bitten by the trading bug or are just interested in knowing what people around you are talking about, we have some essential trading statistics to give you a clear overview of the industry. The fascinating world of trading extends beyond shares to instruments like bonds, options and futures, forex, cryptocurrency, and more. Read on to learn more so that you can boost your knowledge and craft your own strategy for better returns.
Trading Statistics (Editor’s Choice)
- 55% of US adults invested in the stock market in 2020.
- North America accounts for over 40% of the online trading market.
- More than 60% of trades over $10 million are done through algorithms.
- In 2020, total options and futures trading rose by 39.3% and 32.7%, respectively.
- Daily global forex trading values have nearly doubled since 2007.
Stock Trading Statistics
1. NYSE is the world’s largest stock exchange operator, with an equity market cap of nearly $26T as of July 2021.
This number represents the total value for all companies listed on the exchange. The top stock markets in the world host the shares of thousands of companies. The runner-up is the NASDAQ ($22.53 trillion), followed by the Shanghai Stock Exchange ($7.27 trillion), Euronext ($7.17 trillion), and Japan Exchange Group ($6.6 million), which combines the Tokyo and Osaka markets, stock exchange trading statistics show.
2. In 2019, 78% of all stock trades in the US were executed on national stock exchanges.
The US has 13 operating equities exchanges, with 12 owned by three corporate entities: CBOE Global Markets, Inc., Nasdaq, Inc., and Intercontinental Exchange, Inc. The NASDAQ, one of the three national exchanges owned by Nasdaq, Inc., accounted for 24.1% of the 2019 equity trading volume and 17.2% of the shares traded. Alternative trading systems (e.g., UBS ATS, Crossfinder) and dealer platforms are where off-exchange trades take place. Stock trading statistics show that these accounted for 22% of trading volume and 35% of dollar volume.
(US Securities and Exchange Commission)
3. In 2020, 55% of US adults invested in the stock market.
This number has remained steady over the last few years after peaking at 65% in 2007 before the global recession of 2008. The figure shows that many US investors continue to rely on stocks for long-term investments. However, because of the significant losses suffered in the financial crisis, many have moved to alternative investments, including real estate, gold, bonds, and commodities, while others have chosen to go with spread betting and binary options brokers.
4. The global online trading platform market was worth $8.3 billion in 2020.
Online trading statistics show that with $3.47 billion, North America accounted for the largest share of this pie. The region is also expected to maintain its dominance in the near future, owing to better infrastructure and the presence of several reputed players, including some great trading platforms for beginners, likely to attract new entrants to the market. Globally, the market is forecast to grow at a CAGR of 5.1% to $12.16 billion by 2028.
(Global News Wire)
5. Nearly 80% of day traders quit within the first two years.
Among all day traders, nearly 40% give up after only about a month. Within three years, only 13% continue doing so, and after five years, only 7% remain. At the same time, day trading statistics also show that there are traders who keep going despite having had up to 10 years of negative track record.
6. More than 90% of day traders lose money.
While the exact figures can vary a bit, experts agree that the success rate in day trading is less than 5%. Traders in this category put in sufficient time and practice and begin with a reasonable amount of capital. If success is defined as being negligibly profitable, the rate is about 6% to 8%, according to current day trading success statistics. Of course, given the multiple day trading platforms out there, choosing the right option can also make a notable difference to a trader’s performance.
7. Experts suggest starting with at least $30,000 for working as a day trader in US stocks.
The minimum amount balance required to day trade US stocks is $25,000. Making four day trades in a trading week qualifies you as a day trader. However, since you would have to replenish your account if the balance falls below the minimum amount, it’s advisable to begin with a little extra. The minimum requirements for other global markets can be lower. Even in the US, if you plan to get into day trading for a living, statistics show that there are ways to get by with a lower balance, such as joining a day trader firm or doing swing trading.
8. The average trade length in swing trading is 5 to 10 days.
Swing trading is a fast-paced form of trading where traders hold stocks over a few days or weeks, as opposed to minutes/hours in the case of day traders. Both forms of trading come with inherent risks, but since day trading relies on smaller price movements, the loss risk tends to be lower. Naturally, swing trading statistics show that the rewards can be higher with swing trading. The option that would work better for a particular investor depends on several factors, including skill and experience, underlying market movements, and risk appetite.
(Investor’s Business Daily)
9. The global algorithmic trading market is expected to grow to $18.8 billion in 2024.
This compares to $11.1 billion in 2019. The growth is driven by rising demand for quick and reliable execution, lowered transaction costs, and increased government regulations and surveillance. Algorithmic trading already accounts for a majority of big-ticket trades, with recent algorithmic trading statistics from JPMorgan indicating that more than 60% of trades over $10 million in March 2020 were executed by an algorithm.
10. Algorithmic trading accounted for more than 60% of all US equity trading in 2018.
The algorithmic trading market was worth $3.89 billion in North America in 2018. While the region is expected to continue to dominate the sector for the next few years, the most significant growth in algorithmic trading will be seen in the Asia Pacific and European markets.
11. High-frequency trading represents about 50% of trading volume in US equity markets.
According to high-frequency trading volume statistics for European equity markets, the corresponding figure is estimated to be between 24% and 43%. Overall, high-frequency trading, a type of algorithmic trading characterized by high speeds, high turnover rates, and high order-to-trade rations, has grown rapidly since being introduced in the mid-2000s. High-frequency traders move in and out of short-term positions very quickly and at high volumes; as a result, the reward-to-risk (Sharpe ratio) for such trades is much higher than traditional strategies.
12. Insider purchases beat the market by 11.2% per year, but insider trading statistics show that insider sales are less profitable.
Contrary to popular belief, not all trading involving insiders is illegal. Insiders can sell and purchase shares under certain regulations and must quickly disclose such activity to a public database. For any investor, it pays off to keep an eye on insider activity which can be easily tracked through the SEC website or several other databases.
Statistics on Trading Other Instruments
13. The average daily volume traded in corporate bonds has grown from $14.3 billion in 2008 to $31.2 billion in 2018.
Unlike corporate shares that trade on stock exchanges, bond trading statistics show that most corporate bonds trade over-the-counter. This is because of the considerable variation across bonds based on issuer, maturity, nominal value, coupon rate, credit rating, and so on. NYSE is the only national securities exchange in the US that provides the option for trading corporate bonds. Other ways for individual investors to participate in the bond market include instruments such as mutual funds and exchange-traded funds (ETFs).
(US Securities and Exchange Commission)
14. Derivatives traded on exchanges worldwide reached a record level of 46.77 billion contracts in 2020.
According to recent options trading statistics, driven by the rapid growth of exchanges in Brazil, China, and India, the global exchange-traded derivatives market set a record in trading activity for the third year in a row. Another factor for the growth was the explosion of retail trading of equity options, especially in the US. In 2020, total futures trading rose by 32.7% to 25.55 billion, while total options trading rose by 39.3% to 21.22 billion.
(Futures Industry Association)
15. The US exchange CME Group is the third-largest derivatives exchange globally, with a total trading volume of 4.82 billion in 2020.
CME Group had been the largest derivatives exchange for several years before being overtaken by the National Stock Exchange of India (NSE) in 2019. Per 2020 commodity trading statistics, NSE’s total trading volume for the year was 8.85 billion contracts, a 48.1% increase over 2019. Brazil’s B3 rose to the second position in 2020 with a volume surge of 62.5% to 6.31 billion.
16. Currently, roughly 30 different commodities are traded on US exchanges.
Apart from directly trading in commodities or their options and futures, investors can participate in the commodity market through ETFs, exchange-traded notes (ETNs), and stocks of commodity companies. The two main commodity futures exchanges stateside are the CME Group and the ICE Futures Exchange. Different countries can have different commodities accounting for major trades. According to US commodity trading statistics, the main ones are soft commodities (plant and animal-based), such as corn, soybeans, live cattle, lean hogs, and cocoa, and hard commodities (extracted from the earth), such as crude oil, coal, and gold.
17. The forex market is the biggest in the whole financial system, estimated at $2,409 trillion annual trading value in 2019.
This comes to about $6.6 trillion worth of trading per day, a figure that has seen a 98% increase since 2007. These forex trading statistics may be surprising to those outside the financial world, as stock trading sees a much more comprehensive news coverage. The forex trading market, however, is 26 times bigger than the world equity market by market cap, 25 times bigger than the bond market, and 115 times bigger than the US GDP.
18. Retail forex trading represents just 5.5% of the foreign exchange market.
For the longest time, forex trading was limited to government institutions and banks with huge capital. Forex trading became accessible to retail traders only in the 1990s with the opening up of many economies and developments in communication technology. Even today, forex trading statistics show that Deutsche Bank alone accounts for 21% of the market.
19. As of September 2021, the global cryptocurrency market cap is $1.89 trillion.
Massive as it may seem, this figure is actually lower than the all-time high of nearly $2.5 trillion reached in May 2021. If all virtual currencies were considered one country, the current market cap would make it the world’s ninth-richest by GDP. Bitcoin contributes a little under half of this market cap ($808 billion), followed by Ethereum, Tether, Cardano, and Binance Coin. According to 2021 trading statistics, there are over 6,000 cryptocurrencies in existence. No wonder then that the top Bitcoin trading platforms are increasingly offering more choices to customers.
20. Investors have suffered $12.6 billion in losses in cryptocurrency hacks since 2011.
With more and more people hoping to make money through online trading in currency, stocks, and commodities, the opportunities for hackers and scammers have increased manifold. While online trading statistics show that app-based and desktop trading are generally not the primary targets for large scams, even smaller, unreported frauds can prove disastrous for individual investors. This makes it critical for retail investors to research brokers and platforms properly before parting with their hard-earned cash.
(Hacker Noon, Investor.gov)
Technology has democratized the world of trading, opening up an avenue for earning money that wasn’t available to many until even a few years ago. If there’s one takeaway from these diverse trading statistics, it is that the retail trading slice is growing even faster than the overall trading pie. At the same time, given the inherent risks of trading, as well as the increased opportunities for foul play, people need to spend time on research to choose the right platforms for their investments.
References: Statista, US Securities and Exchange Commission, Statista, Global News Wire, Tradeciety, VantagePointTrading, The Balance, Investor’s Business Daily, Analyzing Alpha, Analyzing Alpha, VoxEU, Investopedia, US Securities and Exchange Commission, Futures Industry Association, The Trade, The Balance, BIS, AllFXBrokers, CoinMarketCap, Hacker Noon, Investor.gov