They’re back: day traders lift volumes

Day traders are back with a vengeance, illustrated by the increased traffic at online trading sites. It has fuelled a significant rise in both volume and price for a number of resources and technology stocks. Their activity has contributed to a 22 per cent jump in the daily number of transactions on the Australian Stock Exchange in 2003.

There are only about 3,000 traders who make more than 45 trades in a quarter, ACNielsen.consult says, but that number has a hugely disproportionate impact in terms of trading volume. The average number of daily transactions on the ASX has increased from 50,000 at the start of 2003 to 61,000 in August 2003, according to the ASX. This is, however, well under the totals during March 2000 when the high-tech boom was in full sway and the ASX processed 85,000 trades a day. One day trader says a new pattern has emerged in the past six months based on “trading conglomerates” of up to a dozen young day traders. They come together to collaborate resources and make investment decisions.