FinTech n. 10 - July 2022 [PDF]

The study, stemmed out by the collaboration between Consob and the "Scuola Normale Superiore" of Pisa, refers to the trading activity of all retail investors in the Italian Stock Market and investigates the changes in the population and the trading activity in conjunction with and subsequently to the restriction periods imposed by the Italian Authorities in order to contain the spread of the pandemic, from 9^th March to 18^th May 2020 (national lockdown) and from 24^th December 2020 to 14^th February 2021 (peak of the restrictions adopted by most of the 20 Italian regions; second partial lockdown).

The analysis refers to data from the Italian Electronic Stock Market in the period from January 2019 to September 2021.

The evidences show that the restrictions associated with the lockdown periods have been accompanied by a generally increased interest in the Italian Stock Market, as demonstrated by the trading volume of individual investors.

Due to the generalized decline in prices during the tightening periods, retail investors, typically contrarians, were net buyers, albeit for individual average values lower than the individual average recorded in 2019. This can be explained by the admission to the MTA, during the lockdown, of a group of approximately 185,000 new investors, i.e. investors who - compared to the reference data set (starting in January 2019) - had never traded.

The analysis provides further information resulting from the comparison between new and active investors also in the previous period (pre-lockdown population). In particular, the research shows that new investors are on average ten years younger; by the observation of the gross profit and loss - they seem to be more capable of making a profit, therefore more skilled in trading; furthermore, the segment of males is higher among new investors than in the pre-lockdown population.

The study also provides indications relating to the fact that the lockdown periods, and more generally the COVID pandemic, led to a change in the population of retail investors on the Italian Stock Market, with an increase of the market share of these investors