The Rise in Coordinated Trading
The Covid-19 pandemic has seen a considerable rise in retail investing, with a Reddit-fired ‘army’ of investors causing significant impact when called upon. So how did this happen? And how can you protect your business from these events in the future?
You probably heard about the now-infamous GameStop phenomenon back in January of this year, which saw stock soaring from terminal decline to briefly being one of the most valuable in the market before regulators eventually stepped in.
The example is one of a few instances where thousands of regular people with no formal financial training nose-dived into trading, disrupting an industry that until recently had been dominated by big organisations for decades. In the past, amateur traders have had little impact; however, with the emergence of social media, platforms such as Reddit have become the perfect soundboard to discuss sophisticated strategies and cause maximum harm.
Events like GameStop, which hit the headlines around the world hard, have only given the movement even more attention, attracting further interest of ordinary people wanting to find out more. This new wave of coordinated trading is unlikely to lose traction any time soon.
With new technology providing even more ways for users to hit multiple brokers simultaneously, it’s important to act now and protect your business ahead of future events:
Use sophisticated algorithmic techniques and predictive trading signals to be sure you know where the market is and protect you from harm
Be prepared - know what to look for in daily analysis
Use real-time alerting to keep on top of negative client trading.
Sharpen up client classification, making sure you aren’t B-booking the wrong clients
Create your own rates to stay competitive
