One in six regular retail investors and traders are copy traders, study finds

Approximately one in six regular retail investors/traders are engaging in copy trading, reflecting the growing trend of mirroring other traders’ portfolios, according to recent research.

According to the research by GraniteShares, an issuer of exchange traded products, trading platforms such as eToro, AvaTrade, Pepperstone, FP Markets and FXCM offer copy trading services which enable traders to view the portfolios of other investors and even automate their trading to match the other portfolio

The research surveyed 1,035 UK adults aged 18 and over, including 264 regular stock market investors and 145 digital asset traders, from February 9 to 12, 2024, using an online method.

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According to the findings: “It can be marketed as a way for investors to benefit or profit from the trades of others but critics warn it can lead to inexperienced investors taking major risks with their money.”

Copy trading has taken off following the rise of online trading with people new to share trading keen to follow the portfolios of online experts, it added. 

The study revealed that 16% of regular stock market investors employ copy trading strategies. Among those utilising copy trading, approximately 60% identified it as their primary reason for entering trading. 

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Additionally, nearly 23% of copy trading users adopted the practice within the last two years, while close to 9% have been employing this technique for over five years. 

Most copy traders utilise this strategy for only part of their trading activities, with around 86% reporting that less than half of their trades involve copy trading. Only about 5% of respondents estimated that 75% to 100% of their trades are executed via copy trading.

Will Rhind, founder and CEO of GraniteShares, commented: “It is reassuring to see that copy traders are not basing their entire strategy on the technique as not all investors will have the same appetite for risk or capacity for loss.”

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