The French
online trading and listed derivatives markets are demonstrating resilience
despite recent declines in active trader numbers, according to two new reports
released by Investment Trends. The studies reveal evolving investor profiles
and highlight opportunities for brokers in a changing landscape.
The Number of FX/CFD
Traders in France Drops to 2020 Levels
In the
leveraged trading space, the 13th edition of the France Leverage Trading
Report reveals that French CFD and FX trader numbers remain resilient
compared to other markets studied. While overall trader numbers have declined,
testing four-year lows, they remain above pre-pandemic levels, retaining half
of the growth achieved during that period.
“While
new French trader numbers have declined, the report highlights clear
opportunities for growth, driven by new entrants seeking to learn new skills or
access higher returns and reactivated traders responding to event-driven
factors such as market outlook and volatility ,” Lorenzo Vignati, Associate
Research Director at Investment Trends. “Brokers would be well served by adapting their strategies
to attract and engage this client base.”
An earlier study by Investment Trends from July showed that France is currently one of the smallest FX/CFD markets in Europe among major highly developed countries. This is evident not only in terms of the number of investors but also in the average margin per trade. For instance, in France, it stands at €650, while in Italy it is €1,500, and in Germany, €1,150.
The report
also notes a shift in trading behavior, with French traders showing increased
interest in commodities and FX. There’s also growing use of advanced charting
tools, reflecting a demand for more sophisticated technical analysis
capabilities.
“The
increased uptake of commodities and FX trading reflects the growing
sophistication of French trading strategies,” Vignati explained.
“Brokers who offer robust technical support and tools for these asset
classes will be best positioned to meet the evolving demands of traders seeking
greater control and insight into their trades.”
One in Three Investors in
France Considers Themselves a “Novice”
In
addition, the 2024 France Online Trading Report shows that while the
number of active online investors in France decreased by 8% over the past year,
this decline is significantly less steep than the 17% drop observed in 2023.
The market is buoyed by strong inflows of new investors and reduced dormancy
rates.
“France’s
retail online investing market shows positive signs – stronger inflows of
new-to-market investors and a lower dormancy rate compared to 2023 – even as
online investor numbers decline for the third consecutive year,” added Vignati.
“Brokers have a critical opportunity to engage with this more experienced
investor base, offering tailored services that match their larger portfolios
and specific needs.”
New
investors are increasingly resembling pre-pandemic profiles, with higher
average ages and larger portfolio sizes. These entrants are attracted by the
ability to invest small amounts, while reactivated traders are drawn to
commission-free trading and a wider range of investment options.
The reports
also highlight a significant educational opportunity, with 30% of online
investors in France self-identifying as ‘novice’ or ‘advanced beginner’. This
group is actively seeking guidance, with financial media being their most
trusted information source.
“The
demand for education among newer investors opens a valuable opportunity.
Providers that offer robust educational resources and tools will be best placed
to support novice traders and help them build confidence,” Vignati added.
Changes in Listed
Derivatives Market
In the
listed derivatives market, the number of retail traders has declined for the
third consecutive year, but at a slower pace than previously observed. Notably,
dormancy rates have fallen significantly, and client reactivations are on the
rise. Investors are showing a growing preference for listed derivatives over
CFDs, attracted by transparent pricing, better risk management , and the ability
to make smaller trades.
A similar decline was also noted in the United Arab Emirates market, about which Investment Trends wrote in June. There, a decrease of 6% was reported.
“The
increased reactivation of dormant traders, coupled with a growing preference
for the simplicity and clarity of listed derivatives, signals an opportunity
for brokers to capture more market share in France by focusing on transparency,
trading ideas and strategies, reduced costs, and risk management tools. These
are key differentiators in a competitive landscape,” noted Vignati.
French
trader satisfaction has reached a six-year high, driven by improvements in
decision-support tools and technological advancements. However, traders are
calling for lower overnight funding costs, enhanced loyalty programs, and
further advancements in charting and decision-support technology.
The French
online trading and listed derivatives markets are demonstrating resilience
despite recent declines in active trader numbers, according to two new reports
released by Investment Trends. The studies reveal evolving investor profiles
and highlight opportunities for brokers in a changing landscape.
The Number of FX/CFD
Traders in France Drops to 2020 Levels
In the
leveraged trading space, the 13th edition of the France Leverage Trading
Report reveals that French CFD and FX trader numbers remain resilient
compared to other markets studied. While overall trader numbers have declined,
testing four-year lows, they remain above pre-pandemic levels, retaining half
of the growth achieved during that period.
“While
new French trader numbers have declined, the report highlights clear
opportunities for growth, driven by new entrants seeking to learn new skills or
access higher returns and reactivated traders responding to event-driven
factors such as market outlook and volatility ,” Lorenzo Vignati, Associate
Research Director at Investment Trends. “Brokers would be well served by adapting their strategies
to attract and engage this client base.”
An earlier study by Investment Trends from July showed that France is currently one of the smallest FX/CFD markets in Europe among major highly developed countries. This is evident not only in terms of the number of investors but also in the average margin per trade. For instance, in France, it stands at €650, while in Italy it is €1,500, and in Germany, €1,150.
The report
also notes a shift in trading behavior, with French traders showing increased
interest in commodities and FX. There’s also growing use of advanced charting
tools, reflecting a demand for more sophisticated technical analysis
capabilities.
“The
increased uptake of commodities and FX trading reflects the growing
sophistication of French trading strategies,” Vignati explained.
“Brokers who offer robust technical support and tools for these asset
classes will be best positioned to meet the evolving demands of traders seeking
greater control and insight into their trades.”
One in Three Investors in
France Considers Themselves a “Novice”
In
addition, the 2024 France Online Trading Report shows that while the
number of active online investors in France decreased by 8% over the past year,
this decline is significantly less steep than the 17% drop observed in 2023.
The market is buoyed by strong inflows of new investors and reduced dormancy
rates.
“France’s
retail online investing market shows positive signs – stronger inflows of
new-to-market investors and a lower dormancy rate compared to 2023 – even as
online investor numbers decline for the third consecutive year,” added Vignati.
“Brokers have a critical opportunity to engage with this more experienced
investor base, offering tailored services that match their larger portfolios
and specific needs.”
New
investors are increasingly resembling pre-pandemic profiles, with higher
average ages and larger portfolio sizes. These entrants are attracted by the
ability to invest small amounts, while reactivated traders are drawn to
commission-free trading and a wider range of investment options.
The reports
also highlight a significant educational opportunity, with 30% of online
investors in France self-identifying as ‘novice’ or ‘advanced beginner’. This
group is actively seeking guidance, with financial media being their most
trusted information source.
“The
demand for education among newer investors opens a valuable opportunity.
Providers that offer robust educational resources and tools will be best placed
to support novice traders and help them build confidence,” Vignati added.
Changes in Listed
Derivatives Market
In the
listed derivatives market, the number of retail traders has declined for the
third consecutive year, but at a slower pace than previously observed. Notably,
dormancy rates have fallen significantly, and client reactivations are on the
rise. Investors are showing a growing preference for listed derivatives over
CFDs, attracted by transparent pricing, better risk management , and the ability
to make smaller trades.
A similar decline was also noted in the United Arab Emirates market, about which Investment Trends wrote in June. There, a decrease of 6% was reported.
“The
increased reactivation of dormant traders, coupled with a growing preference
for the simplicity and clarity of listed derivatives, signals an opportunity
for brokers to capture more market share in France by focusing on transparency,
trading ideas and strategies, reduced costs, and risk management tools. These
are key differentiators in a competitive landscape,” noted Vignati.
French
trader satisfaction has reached a six-year high, driven by improvements in
decision-support tools and technological advancements. However, traders are
calling for lower overnight funding costs, enhanced loyalty programs, and
further advancements in charting and decision-support technology.
This post is originally published on FINANCEMAGNATES.
