US banking crisis drives retail trading in bank stocks to record levels

Global banking turmoil renewed interest in banking stocks among retail traders in March, who took advantage of lower bank valuations to buy the dip and subsequent sell off on the back of negative news flows, UK-based trading platform Capital.com said in its Q1 pulse report.

Retail trading volumes in contracts for difference (CFDs) – a financial derivative that allows traders to speculate on a financial market without owning the underlying asset – on Silicon Valley Bank (SVB) shares increased by more than 8,000% in Q1 2023 quarter-on-quarter, the report stated.

Over the same period, total CFD trades on Credit Suisse climbed by 9,644%, while UBS saw trading volumes grow by over 4,000% in Q1 quarter-on-quarter.

Meanwhile, the now-failed bank, First Republic, saw CFD trades on its shares climb by a staggering 314,467% in Q1 2023 from Q4 2022.

Daniela Hathorn, Senior Market Analyst at Capital.com, said: “After a bout of banks breaking down, borrowing, and eventually collapsing, our traders turned their attention to global banking stocks. This renewed interest was particularly noteworthy after the fall of SVB on March 10, 2023.”

This report’s information was first seen on ZAWYA; to read more, click this link.