Global banking turmoil renewed interest in banking stocks among retail traders in March, who took advantage of lower bank valuations to buy the dip and subsequent sell off on the back of negative news flows, UK-based trading platform Capital.com said in its Q1 pulse report.

Retail trading volumes in contracts for difference (CFDs) - a financial derivative that allows traders to speculate on a financial market without owning the underlying asset - on Silicon Valley Bank (SVB) shares increased by more than 8,000% in Q1 2023 quarter-on-quarter, the report stated.

Over the same period, total CFD trades on Credit Suisse climbed by 9,644%, while UBS saw trading volumes grow by over 4,000% in Q1 quarter-on-quarter.

Meanwhile, the now-failed bank, First Republic, saw CFD trades on its shares climb by a staggering 314,467% in Q1 2023 from Q4 2022. 

Daniela Hathorn, Senior Market Analyst at Capital.com, said: “After a bout of banks breaking down, borrowing, and eventually collapsing, our traders turned their attention to global banking stocks. This renewed interest was particularly noteworthy after the fall of SVB on March 10, 2023.” 

Most traded stocks 

According to the report, Tesla maintained pole position for the fourth consecutive quarter as the most-traded single stock in the first quarter, followed by US big box store Bed Bath & Beyond, e-com giant Amazon and tech titans Nvidia and Apple.

Trading volumes reached over $300 billion in Q1 2023, 12% higher than Q4 2022. The biggest contributors were the Middle East and Australia, where overall client trading volumes were up by 40.8% and 53.8%, respectively, quarter-on-quarter.

The Capital.com report is based on data of all executed trades on its platform between January 1 and March 31, 2023.  

(Editing by Seban Scaria seban.scaria@lseg.com)