From the US to the World: The Growth of Online Trading

From the US to the World The Growth of Online Trading

The US has long been the home of trading. A capitalist nation at its core, the cultural norm is for people to seize financial opportunities whenever possible. Of course, it’s easy to say something intuitively without backing up but, as it transpires, the facts support the assumption that Americans love trading. According to data from World Bank, there were 4,266 listed US companies in 2020 with a total market cap of $40.7 trillion.

China was close behind with 4,154 listed companies. However, the total market cap for those companies was just $12.2 trillion. It’s important to note that the trading sector doesn’t only focus on stocks. Traders have the ability to buy and sell a variety of financial instruments, including forex and commodities. It’s also worth noting that total market cap and listed companies aren’t the only metric to consider when it comes to the most active trading nations.

The US is a Trading Nation, but It’s Not the Only One

Indeed, it’s also important to look at the number of brokers and traders in each country. However, it’s often difficult to obtain accurate numbers for these metrics because private companies don’t always divulge how many customers they have. So, taking all this into account, we can say with a degree of certainty that the US is the most active trading nation in the world. That’s interesting but, what’s more interesting, is the fact trading is becoming more widespread.

Today, almost any adult with some spare cash can trade online. Not only that, there are plenty of resources out there for people to learn about the basics of trading and, in turn, access financial data. These are across numerous languages, for example, someone in Vietnam can type วิธี ใช้ mt4 บน มือ ถือ into a search engine and read through a guide to trading CFDs via MT4’s mobile software. In fact, as well as learning about the trading platform MT4, Vietnamese traders can read through the aforementioned guide to understand the nuances of contracts for difference (CFDs).

Information Abounds Online

Information Abounds Online

What are CFDs? In short, they’re financial products that allow you to speculate on price movements of underlying assets. This, in turn, allows you to speculate on the price increasing (going long) or decreasing (going short). In the same way novice traders in Vietnam and Aasia generally can learn about CFDs online, someone in Australia can get the latest financial headlines via multiple sources, including specialist websites, media sites such as The Australian, and even social media channels. This information is not only localized to Australia but covers important topics from around the world so traders can get a broad overview of the markets and trade a variety of instruments.

Put simply, digital technology has reduced the barriers to entry and made trading more accessible to the masses. Not only is there more information and resources out there, but the conditions traders can also access are more suitable for their circumstances. When trading was carried out by human brokers working with clients on a one-to-one basis, the costs were relatively high. Now, because online brokerages can serve thousands of customers simultaneously, the fees are lower. This, in turn, makes trading less expensive and more of a realistic option for those with smaller amounts of starting capital.

What all this amounts to is a growing community of online traders and, importantly, an internationally diverse community of traders. Even though most trades still take place in the US, other countries are starting to emerge. PwC’s Global Artificial Intelligence Study supports this idea. The report acknowledges that the US is still the biggest international trading hub. However, as reported by Taiwan News, the Asia-Pacific region is expected to “exhibit the highest growth rate/CAGR over the forecast period 2021-2027.” The proliferation of online trading in Asia-Pacific is expected to happen due to ongoing digitization efforts and increased internet usage.

Therefore, what we might see in the coming years is the gap between America and the rest of the world closing. Because the internet has made trading more accessible, people seeking new opportunities are switching on to the potential of stocks, forex, commodities, and other financial instruments. The US may always be the most active nation of traders in the world but, as time goes on and digital technology improves, expect to see people from all around the world entering the financial markets. 


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