The trading landscape can sometimes look very different from that of traditional investing. The main difference is that traded assets and markets move much faster, focusing on the short term.
In this article, I’m going to give you a snapshot of the markets that traders were most interested in last week in the UK and globally on the Capital.com platform. I’ll explain what these choices tell us and how they fit into the whole picture of investing.
Which 5 markets were most popular for UK traders?
The top five markets for traders in the UK last week were:
This is basically the Nasdaq 100, but it’s just given a slightly different name on the platform. It’s not too surprising to see that this equity index was attracting a lot of trading interest last week. There’s been a lot of volatility recently for America’s biggest tech firms.
The fast-changing prices are due to a number of factors, such as changing treasury yields, inflation figures, the impact of coronavirus and general uncertainty about stocks. But all this is great news for traders because there are opportunities to make money when the index rises and falls.
2. Oil – Crude
I’m sure you’ve seen some news about oil prices. They rebounded heavily but then took another hit with further restrictions and supply chain issues.
However, what’s also got traders interested in oil is that as a commodity, some investors will try and use it as a hedge against inflation. So again, this is a market seeing a lot of good and bad news for prices, which plays right into the hands of traders.
Many investors turn to gold in times of trouble. Just recently, crypto traders were turning to it. It’s an age-old commodity that typically holds its value well.
In a period of record inflation and rising prices, some look towards gold as a safe haven asset. However, the price of gold has somewhat lagged, and this underperformance is making people question whether it’s still the reliable investment it used to be. This uncertainty about gold’s power going forward means some traders still have confidence, but others are betting against it.
4. Natural Gas
You’re probably aware of ongoing issues around natural gas. It’s a big part of the reason why energy prices in the UK are rising at a rapid pace.
The demand for natural gas has been increasing, but we don’t have access to a bottomless pit. It’s a finite resource that can only be found in specific places. Our collective push towards greener energy has also left the industry fairly neglected – even though we still rely on it heavily.
This will make some traders think more profits lay ahead, whereas others might be taking profit off the table after such big price jumps.
5. AMC Entertainment Holdings (AMC)
It’s quite amazing to see one single stock making it into this list of top-traded assets. But part of the weirdness of the meme stock craze has been the ability of investors to turn these stocks into fast-trading assets rather than companies to invest in.
No one is interested in the fundamentals of the business or how the financials look, it’s all about what’s hot and what’s not. It’s surprising to see that after so many months, AMC shares are still creating a lot of disruption amongst the markets. Naturally, traders will be looking to take advantage of the peaks and troughs that come along with such a phenomenon.
What were the top 5 markets for global traders?
Although fairly similar to what’s popular for UK traders, it’s interesting to see that on a global level, cryptocurrency assets are proving popular. The global top-traded markets look like this:
- Ethereum (ETH)/USD
- Oil – Crude
- Bitcoin (BTC)/USD
- Natural Gas
How should investors use this information?
Trading markets show us some interesting things about what’s happening in the UK economy and around the world. But it’s important to remember that trading is mostly a short-term game.
Here at The Motley Fool, we advocate a longer-term approach to investing. This means buying shares in top companies over a long period of time and building wealth gradually.
If you need to brush up on your investing skills, make sure you check out our complete guide to share dealing. It’s important to remember there are risks with any style of investing. You may get out less than you put in, but solid and durable shares can be great building blocks for your portfolio.
The post These were the 5 most-traded markets for investors last week appeared first on The Motley Fool UK.
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