5 Brokerage Execs On 2020 Market Trends: 'Trading Has Become Cool Again'

Lockdowns during the coronavirus pandemic have prompted a rise in speculative retail trading activity that's reflected in increased client order flow.

The trend was the topic of discussion among five market experts Tuesday at the Benzinga Global Fintech Awards in a panel moderated by Benzinga's Luke Jacobi. 

The Options Clearing Corporation traded a record number of options in a day following positive efficacy news about the COVID-19 vaccine candidate being co-developed by Pfizer Inc PFE and BioNTech SE BNTX, said JJ Kinahan, chief market strategist at TD Ameritrade.

James Putra, head of product strategy at TradeStation, said the volatility in different assets has been the primary engagement factor since lockdowns were lifted.

“Trading has become cool again,” he said. 

The Importance Of Education For Retail Traders: Enhanced, mobile-friendly education is important as lockdowns disappear, as it exposes traders to increasingly complex concepts that can fit evolving trading personalities, said Mary Ryan, senior director at E*Trade. 

When life returns to normal, it's important for brokerages to remain here for investors through "enhanced options education," she said. 

Kinahan said that, unlike in the past, retail investors are taking the time to learn complex products and strategies properly. 

TD Ameritrade is spending more resources on education to assist traders with their goals of becoming profitable, he said. 

“We’ve done a pretty good job of marrying the theory with the trade ideas.”

Innovation At M1 Finance, Schwab: The automated money management platform M1 Finance focuses on a holistic financial experience, said CEO Brian Barnes. 

“M1 tries to help a user manage all their finances,” he said, highlighting M1’s functionality as a tool for investing, borrowing and banking.

“M1 is oriented more toward long-term, systemic investing rather than trading.”

Jeff Chiappetta, the vice president of trading services at Charles Schwab Corporation SCHW, said Schwab is working to maintain long-term engagement through product innovation.

As an example, “Schwab launched stock slices, which allows clients to buy S&P 500 stocks with as little as $5,” he said.

“They’re hungry for new content [and] we’ve launched new segments, combining that live education with stable content.”

TradeStation's Putra noted his firm’s addition of new asset classes, allowing investors to gain increased exposure to differentiated risks.

“Having exposure to crypto assets is great,” Putra said.

“We have high-yield interest on crypto holdings,” which he said allows participants a way to make money on the sidelines when opportunity is minimal.

“We believe this puts the customer on an accelerated path.” 

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