How to Help Clients Navigate Covid Trading Risks

FinanceFeeds Editorial Team

It has been a tough few years for the capital markets. Covid-19 led to mass unemployment, reduced economic activities, surges in inflation, supply-chain crises, and uncertainty surrounding policy to name a few. The result has been intermittent and unpredictable bouts of high volatility in the financial markets.

In 2020, record trading volumes and persistently high levels of volatility through the year tested operating models for brokers. In some asset classes, this surge in trading, coupled with work-from-home (WFH) arrangements led to significant pressure on market operations. In the same year, a study revealed some 30 to 35% of buy-side and sell-side firms faced significantly more operational challenges with regard to post-trade activities in cash equities and cash fixed income.

Amid the rise of new variants and lockdown rules being put back in place without any warning, investor sentiment has also taken a hit. Essentially, covid-19 and associated market volatility has raised risk levels for brokers. This seems a consistent trend, as uncertainty continues into 2022. 

Low Investor Sentiment Poses Business Risk for Brokers

As covid-19 continues with various intensities across the world, investor sentiment has waned. In a September 2021 survey by IHS Markit, it was seen that investors’ risk appetite was the lowest in 12 months due to concerns over the pandemic stretching into 2022. The gradual tapering of monetary and fiscal policies worldwide from 2021 onwards (especially in the US) has also contributed to this declining optimism. A similar sentiment has been observed among East Asian investors, due to looming uncertainty arising from the rapidly spreading Omicron variant.

This poses a serious concern for brokers across the financial market who rely on risk-taking to remain profitable. This lowering of morale and willingness to take risks could result in reduced profit margins for brokers’ and an increased customer churn over time.

A rise in risk-aversion among traders means that brokers will have to re-evaluate their strategies as well. Building confidence in both potential and current traders has never been so important. Now is the time for brokers to find innovative ways to combat trader apprehension and grow confidence in the viability of trading. So how do you do it? 

Autochartist’s Risk Calculator Tool Can Make a Difference

By offering traders Autochartist’s risk calculator tool, brokers can position themselves as valuable partners. This tool helps traders build their risk management strategies and gives them added confidence to make trading decisions, while still keeping the brokers best interest front of mind.  

Autochartist also offers other products, such as our volatility analysis tool which shows traders which times have the best volatility to match their trading style.   These tools offer a unique way for you to boost trader retention and keep those traders profitable

The Power of Actionable Content 

Another way you can boost trader confidence is through actionable content. Information availability has been one of the most valuable assets in the financial markets. Research proves that information has a complex correlation with financial market volatility. During periods of uncertainty, investors and traders demand content that can help them make informed decisions.

With Autochartist, brokers can provide clients with the informative content they are demanding without any of the usual hassles. We offer content for all stages of the traders’ journey, but our winning trade and correlated alert content has proven to be a major asset when it comes to encouraging redeposits and reactivation. 

Our content is also available in multiple languages and can be tailored to include high impact news events and overall market analysis. All our content is coupled with a strong trade now button with fully customisable deep links so you can control your traders’ journey. 

In the current climate of uncertainty, brokers need to equip traders to manage their risk in a more efficient way, to ensure client retention and success. The time of simple trading signals has passed and the time for a new engagement hero has arrived. 

To find out more about how Autochartist can help you build trader confidence and grow your profit margins why not Contact Us to learn more. 

Read this next

Executive Moves

Stash appoints Liza Landsman as CEO to further grow investing app

Stash is an investing and banking app with over 2 million active subscribers. Its subscription plans start at just $3 a month, and offer a range of products including investing, banking, education, and advice.

Institutional FX

Invast Global ramps up its offering with 10 soft commodity CFDs

Sydney-based prime-of-prime provider Invast Global has expanded its offering with the addition of ten soft commodity CFDs, which increases their index and commodity CFD offering to 35 instruments.

Retail FX

FF Simple and Smart Trades says Goodbye to CySEC authorization

The Cyprus Securities and Exchange Commission (CySEC) confirmed that it has wholly withdrawn the Cyprus Investment Firm (CIF) licenses of FF Simple and Smart Trades Investment Services Ltd.

Crypto Insider

Shining the Light in Crypto’s Dark Places

Something changed in regulators’ minds after the November crash of the FTX crypto exchange.

Executive Moves

Financial Commission Adds Sam Low to Dispute Resolution Committee

The Financial Commission (FinaCom PLC), a dispute resolution service that caters to the financial services industry, has appointed Sam Low as the newest member of its Dispute Resolution Committee (DRC).

Digital Assets, Uncategorized

De-facto owner of Bithumb exchange arrested in South Korea

South Korean prosecutors have arrested Kang Jong-Hyun, the anonymous chairman and owner of the country’s largest cryptocurrency exchange, Bithumb, on charges of embezzlement and stock manipulation.

Retail FX

Interactive Brokers volumes snap three-month losing streak

Electronic brokerage firm Interactive Brokers LLC (NASDAQ:IBKR) said its trading volumes rose in January, an indication that investor confidence in the financial markets is rebounding after having been fairly mixed over the past few months.

Digital Assets

VVF invests $5 million in Everscale, a potential Layer 2 solution for Venom blockchain

“For us, this is a strategic investment aimed at the technological development of projects and teams around technologies that we focus on and actively develop. In particular, we are talking about the Venom blockchain project and its ecosystem, which is planned to be launched soon and for which Everscale is a potential Layer 2 solution.”

Institutional FX

FXSpotStream volume ends string of declines on January rebound

Trading volumes on institutional FX platforms surged in January as traders increased their bets on central bankers’ policy with evidence mounting that inflation and economic growth are both losing momentum.