It’s no secret that the pandemic gave new life to stock trading, aided by access to commission-free trading from brokerages and easy user interface and signup, especially from popular trading platform Robinhood.
But new data from Fidelity, a brokerage house with more seasoned investors than Robinhood, shows just how pervasive this new trading attitude is. In the third quarter of 2020, Fidelity saw an average of 2.2 million daily trades, 97% higher compared to Q3 of 2019, an astounding number. Last quarter saw a similar jump compared to 2019, and comes on the back of Q2’s results, which saw a 106% increase from the same period a year before.
In some cases, increased trading volume has stressed brokerages’ servers, with Fidelity’s platform going down earlier this month amid heavy traffic driven by volatility.
The second quarter’s results coincided with some of the market’s wilder volatility this year — after the initial crash in March — but the third quarter cements this as a broader trend. Even as the market steadied following the initial U.S. exposure to the coronavirus, people were logging into their Fidelity accounts (digital activity was up 59% year-over-year in Q2) and trading.
Put into context, Fidelity’s trading numbers look even bigger. Though trading volume has doubled, the amount of customer assets under Fidelity’s administration is only up 13% to $8.8 trillion. Considering that during this time, the S&P 500 index (^GSPC) also rose by 13%, the ratio of activity to assets owned shows that many investors have completely abandoned previous buy-and-hold best practices Fidelity recommends. At the same time, however, some retail investors may be improving their investing knowledge as they take advantage of companies’ blogs and educational content.
Not only are there 2 million new Fidelity customers compared to last year’s Q3, bringing the total to 32 million investors with 76 million accounts, but they’re also calling. In a statement, Fidelity CEO and Chair Abby Johnson said call volumes across the company have skyrocketed to record numbers. To handle all the new clientele, last month Fidelity said it’s planning to hire 4,000 people (including financial advisers and customer service agents).
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Ethan Wolff-Mann is a writer at Yahoo Finance focusing on consumer issues, personal finance, retail, airlines, and more. Follow him on Twitter @ewolffmann.
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