Is social trading still popular, even though it accounts for only 3% of all trade volume?

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The idea of social trading was initially presented in 2008, more than ten years ago. Many retail traders immediately adopted it, and today more than one-third of brokers provide it. What has changed since then? Does it help brokers and the clients they represent?

We use the term “social trading” to describe social investing occurrences. This broad category, however, encompasses a number of distinct subcategories that are distinct from one another. We have what are referred to as “chat platforms,” “mirror trading” and other similar terms. All of these components are regarded as falling within the so-called “social trading” umbrella.

Although not the only one, ZuluTrade was the first to offer social trading features. There were other platforms like it. Without Facebook, the first and most well-known social network at the time, its popularity would not have been able to expand. The quick rise of Facebook demonstrated to all industry players that a new era had arrived, one in which online social interactions were becoming more than just a niche interest for a select group of tech enthusiasts.

We have been using social trading systems since they first appeared in 2008, or 15 years ago. After so many years, it becomes sense that social trade would predominate in the retail sector. But none of this is visible. Even though we are unable to access statistics for all brokers offering this service, the majority of companies who do (with the exception of so-called “social brokers” like eToro or NAGA) claim social trading volumes that range from 1% to 3% of their overall volumes.

A quick review of Google Trends for the keyword “social trading” seems to support the notion that there is increasing interest in this type of investing. We can observe that, from 2008 to 2017, the popularity of this term in Google searches increased significantly. While it somewhat declined for the following two years, it started to rise once more in 2019.

Research was done on how common social trading is across FX/CFD firms that revealed that 37.7% of brokers in the volume rank offer their clients some type of social trading. You can read more in our guide to social trading.

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