Retail trading hits snags amid record trading volumes

Published On: November 10, 2020Categories: Stocks & Shares2 min read

Equities rallied after the first successful data from a clinical trial of a Covid vaccine caused a stampede to buy stocks

Stock trading volumes on retail platforms hit record levels on Monday, although the impact of positive news about Pfizer’s experimental COVID-19 vaccine triggered problems for clients of some major brokerages.

Equities rallied after the first successful data from a large-scale clinical trial of a coronavirus vaccine caused a stampede to buy stocks.

However, some retail traders said technical difficulties meant they had missed out on the rally.

Monitoring website said customers of Merrill Lynch, Fidelity, Charles Schwab Corp, TD Ameritrade and Vanguard had problems logging in or placing orders.

Charles Schwab and TD Ameritrade acknowledged issues with their platforms and later said in statements posted on Twitter that they have been resolved.

A spokesman Merrill Lynch said it had not experienced an outage after said more than 1,000 clients reported problems logging into Merrill Lynch accounts within the first two hours of trading.

A spokesman for IG Group said “unprecedented” trading volumes in the 30 minutes after the Pfizer announcement were up to 10 times the level seen earlier in the day and broke a previous record set in March when markets recorded sharp falls at the peak of virus-related restrictions.

Retail brokers, which have been under scrutiny for outages, spent months shoring up their platforms in preparation for record volumes following the election, but the latest pandemic related development proved to be a harder test.

It’s unthinkable that a piece of news could eclipse the result of a U.S. Presidential election, but Pfizer’s vaccine results have done just that, said AJ Bell analyst Laith Khalaf. The stock market is experiencing a serious melt-up, and safe havens like gold and bonds have sold off.

Oil prices, which plunged into negative territory in April, rose by nearly 10% and global stocks scaled record highs after Pfizer and German partner BioNTech said that based on initial trial results their experimental vaccine was more than 90% effective in preventing COVID-19.

Retail participation in the equities markets has surged since March, as shares soared in response to government stimulus aimed at countering the coronavirus’ economic impact.

Traders rushed to stocks hit by the pandemic, including oil companies, hospitality groups, fashion retailers and airlines.

In what could perhaps be the clearest sign that markets are counting on life getting back to normal, shares in cinema operators AMC and Cineworld rose by about 40%.

Hargreaves Lansdown, a fund and trading platform with more than 1.4 million investors, said the trial results prompted the busiest day in volumes on its website and app.

About the Author: Jonathan Adams

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