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Spectrum Markets launches Retail Investor Index to track how private investors are trading


Spectrum Markets, the pan-European trading venue for securitised derivatives, has announced that 54.4 million securitised derivatives were traded on its exchange in April, with 36% of trades happening outside of traditional hours (i.e. between 17:30 and 9:00 CET).

82.9% of all securitised derivatives traded were on indices, 11.8% on currency pairs and 5.3% on commodities. The top three traded underlying markets were DAX (23.1%), OMX 30 (23%) and S&P 500 (14%).

In order to better understand not just which underlyings are capturing retail investors’ attention but how they are thinking about these markets, Spectrum Markets is launching the Spectrum European Retail Investor Index (SERIXTM), which uses the exchange’s pan-European trading data to shed light on investor sentiment towards current development in financial markets.

The index is calculated on a monthly basis by subtracting the proportion of bearish trades from the proportion of bullish trades, to give a single figure (rebased at 100) that indicates the strength and direction of sentiment:

SERIXTM = (% bullish trades – % bearish trades) + 100

Trades where long instruments are bought and trades where short instruments are sold are both considered bullish trades, while trades where long instruments are sold and trades where short instruments are bought are considered bearish trades. (For a detailed methodology and examples, please visit this link).

Looking at the three most popular underlyings in April, SERIXTM data reveals improving retail investor sentiment towards the DAX, as it moved into bullish territory with a value of 101, compared to 97 and 93 in February and March respectively.

The OMX 30 remained bearish in April at 94, though sentiment on this market is trending more positive since the start of the year where it has ranged from 90 to 91. Meanwhile sentiment around the S&P 500 was sharply bearish, dipping to 90 last month, which is the lowest reading for this market since August 2020.

Gold remains a popular trade

Gold remained popular, with a SERIXTM value of 107, continuing a theme seen since August last year in which bullish sentiment has ranged between 102 and 111.

“Indices by themselves don’t tell the whole story.,” explained Michael Hall, Head of Business Development at Spectrum Markets. “They just reflect the current market movements. The SERIXTM offers an additional measuring instrument which also reflects the sentiment. Often we are seeing indices and SERIXTM moving in different directions. This indicates a mood swing, which could arise on the eve of a turnaround event.”

Spectrum Markets is the trading name of Spectrum MTF Operator GmbH. Headquartered in Frankfurt am Main, Germany, it is a pan-European trading venue for securitised derivatives aimed at financial institutions and their retail investors. Since launch, trading has been available in: Germany, France, Italy, Spain, Sweden, Norway, the Netherlands, Ireland, and Finland

Regulated by BaFin and MiFID II compliant, the exchange uses a uniquely open architecture system to allow investors to trade with increased choice, control and stability. Through its pan-European ISIN, 24/5 trading services and its own proprietary venue, Spectrum enables a guaranteed baseline level of liquidity over a range of products and is able to swiftly and safely match a significant number of orders and process multiple quotes every second.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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