Clients increase short positions as markets remain volatile
(MENAFN – ValueWalk)
June 24, 2022 – According to data from global investment trading platform Capital.com, 38% of trades made by its clients so far this quarter are short, up 15% from the same period l last year. This may suggest that traders have become more bearish over the year, although of course, overall most still favor the long side of the market.
Traders choose to sell short
David Jones, Chief Market Strategist, Capital.com:
“Given the extent of market slippage – across all sorts of asset classes this year – it is perhaps unsurprising that more traders are choosing to sell short, to perhaps position themselves to profit. of further market weakness, or even hedge other investments.
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Once again, the NASDAQ 100 proved to be the most popular market for traders this week. Volatility still attracts traders – and we continue to see big swings in global equity indices. Just last week, the NASDAQ hit its lowest levels since November 2020. The past few days have seen something of a bounce, but at the moment opinion seems to be split as to whether this is of a sustained rally or just another dead cat bounce before the market. slide down again.
The area that has seen the biggest jump in short trades is commodities. This may suggest – for some traders at least – that there is some level of comfort in trying to call the top of the great commodity bull run that has persisted for at least the past two years. Of course, a fall in commodities would be welcomed by many economies around the world as it would help slow the rise in inflation.
After the NASDAQ index, the next two most traded markets on Capital.com over the past week have been in the energy group: crude oil and natural gas. In June, West Texas Crude fell from over $120 a barrel to $101. Although they don’t have a firm direction, these types of swings offer plenty of overnight volatility to entice short-term traders. Natural gas has again been more volatile than crude oil, with geopolitical developments being a major driver for this market recently, as Europe tries to find alternatives to Russia for its energy needs. This month, U.S. natural gas has fallen 38% in less than three weeks – it remains to be seen if we’ve seen a significant top in this market yet – or if it’s just a another buying opportunity before prices rise again.
Capital.com is a high-growth investment trading platform that enables people to participate in financial markets. Its intuitive, award-winning platform, available on the web and app, provides investors with a seamless trading experience in over 6,000 world-renowned markets. To help investors trade with confidence, the platform features strong risk management controls and transparent pricing, while its all-in-one Investmate app offers comprehensive financial lessons and educational content for helping clients on their investment journey.
Updated on June 24, 2022 at 12:01
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