New kids on the block

Bread-making, gardening, playing the Last of Us Part II. The pandemic got many of us to take up new hobbies to pass the time.

But it also got many young people into a potentially more lucrative hobby: day trading. 

Stuck at home with a flexible schedule and perhaps a bit of extra cash from not going out, many Gen Z’ers decided to dabble in the markets. 

This should not be too surprising. Gen Z, who are aged 18-22 years old, are known to be an entrepreneurial lot. Online platforms like Depop, Fiverr and Etsy have made it easy for this cohort to earn some extra cash through a side hustle and the proliferation of mobile trading apps means it is easier than ever to start day trading. 

We see that in the data. This group trade mainly through mobile, with nearly three quarters (79%) of Gen Z respondents saying they traded through apps, compared to just a third (37%) of all respondents.

But while Gen Z may be keen to earn some extra cash, they aren’t just in it for the money. 

Day traders aged 18 to 22 years typically trade because they want to be their own boss, with nearly two thirds (63%) of Gen Z respondents saying that striking out alone was their main reason for trading. Just 11% said they were trading to earn more money than as a traditional employee.

In the long term, this may play to this generation's advantage. 

Chess grand master Anastasiya Karlovich believes that leading players typically put money out of their mind when they play. 

“I believe that top players in genera“It puts more pressure. When you are thinking: ‘This move could cost $50,000’, it can be destructive,” she says, adding that thinking about money can take your head out of the game and stop you focusing on the moves in front of you.  

But she says that this is easier for top players to do as they already have financial security, gained through years of winning competitions.  l are a bit more relaxed [about the money]. All of them pretend the result is more important than money,” she says. can bring, trading is not without its risks and it isn’t  proving to be as profitable as they may have hoped.  

Over half (53%) of Gen Z respondents said they had made no profit or even lost money over the past six months of trading. This is over three times higher than the generation above them, with just 15% of Millennials saying they made no profit or lost money in the past six months.This may be because younger traders are more likely to make riskier bets. Research by the UK’s Financial Conduct Authority found that many younger investors went f

When we interrogate the data further, we see that while Gen Z may be excited about the lifestyle that trading or “high risk high return” investments, such as crypto currencies. 

That lack of success is also feeding through into their confidence levels, just 11% said they were confident in their trading abilities, compared to a quarter of Millennials and 45% of baby boomers. They are more likely to trade impulsively, with 58% saying they sometimes make quick decisions without planning or proper analysis. While a quarter (26%) say they often hesitate.

Gen Z also finds it harder to get money to trade with. Lack of capital was the number one barrier to trading for this group and nearly half (47%) said they used “as much leverage as possible” when trading, compared to 16% of all respondents. 

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