Banking crisis: DIY investors piled into Credit Suisse and Silicon Valley Bank trades during turmoil
Do-it-yourself investors piled into banking trades in the first quarter of the year as the sector was shaken by the collapse of Silicon Valley Bank and shotgun sale of Credit Suisse to UBS, new data has revealed.
Retail trading platform Capital.com, which processed over $300bn in total trades in the first three months of the year, said it saw a surge in banking sector activity as investors tried to capitalise on extreme volatility in the market.
The London headquartered firm said contacts for difference trades in Credit Suisse shares on its platform, which allow investors to profit from moves in price, climbed by 9,644 per cent in the first three months of the year while UBS shares saw trading volumes grow by over 4,000 per cent.
Investors also piled into trades against now collapsed US lender First Republic, which saw CFD trades on its shares climb 314,467 per cent between January and March.
Fears of a banking crisis triggered a tumble in global banking stocks in the three months to March as jitters over the stability of US regional banks and Credit Suisse spread across regions.
Daniela Hathorn, Senior market analyst at Capital.com, said traders on its platform typically shunned the sector but had pounced on the volatility.
“After a bout of banks breaking down, borrowing and eventually collapsing, our traders turned their attention to global banking stocks,” she said.
“This renewed interest was particularly noteworthy after the fall of Silicon Valley Banks (SVB) on 10th March 2023. Prior to the collapse of SVB and the rout across the banking sector, Capital.com traders have typically paid little attention to this segment of the market.”
She added that traders on the platform were in “high spirits” despite the banking crisis, buoyed by “solid [first quarter] earnings and economic data that shows resilient economies.”
Capital.com found that Tesla was the most-traded single stock for the quarter for both long and short trades. The stock has been the most traded on the platform for four consecutive platforms.
US retailer Bed Bath & Beyond, Amazon, chipmaker Nvidia and Apple made up the rest of the top five most traded stocks.