The French online trading and listed derivatives markets are demonstrating resilience despite recent declines in active trader numbers, according to two new reports released by Investment Trends. The studies reveal evolving investor profiles and highlight opportunities for brokers in a changing landscape.

The Number of FX/CFD Traders in France Drops to 2020 Levels

In the leveraged trading space, the 13th edition of the France Leverage Trading Report reveals that French CFD and FX trader numbers remain resilient compared to other markets studied. While overall trader numbers have declined, testing four-year lows, they remain above pre-pandemic levels, retaining half of the growth achieved during that period.

“While new French trader numbers have declined, the report highlights clear opportunities for growth, driven by new entrants seeking to learn new skills or access higher returns and reactivated traders responding to event-driven factors such as market outlook and volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term,” said Lorenzo Vignati, Associate Research Director at Investment Trends. “Brokers would be well served by adapting their strategies to attract and engage this client base.”

An earlier study by Investment Trends from July showed that France is currently one of the smallest FX/CFD markets in Europe among major highly developed countries. This is evident not only in terms of the number of investors but also in the average margin per trade. For instance, in France, it stands at €650, while in Italy it is €1,500, and in Germany, €1,150.

The report also notes a shift in trading behavior, with French traders showing increased interest in commodities and FX. There's also growing use of advanced charting tools, reflecting a demand for more sophisticated technical analysis capabilities.

“The increased uptake of commodities and FX trading reflects the growing sophistication of French trading strategies,” Vignati explained. “Brokers who offer robust technical support and tools for these asset classes will be best positioned to meet the evolving demands of traders seeking greater control and insight into their trades.”

One in Three Investors in France Considers Themselves a “Novice”

In addition, the 2024 France Online Trading Report shows that while the number of active online investors in France decreased by 8% over the past year, this decline is significantly less steep than the 17% drop observed in 2023. The market is buoyed by strong inflows of new investors and reduced dormancy rates.

“France's retail online investing market shows positive signs—stronger inflows of new-to-market investors and a lower dormancy rate compared to 2023—even as online investor numbers decline for the third consecutive year,” added Vignati. “Brokers have a critical opportunity to engage with this more experienced investor base, offering tailored services that match their larger portfolios and specific needs.”

New investors are increasingly resembling pre-pandemic profiles, with higher average ages and larger portfolio sizes. These entrants are attracted by the ability to invest small amounts, while reactivated traders are drawn to commission-free trading and a wider range of investment options.

The reports also highlight a significant educational opportunity, with 30% of online investors in France self-identifying as a “novice” or “advanced beginner.” This group is actively seeking guidance, with financial media being their most trusted information source.

“The demand for education among newer investors opens a valuable opportunity. Providers that offer robust educational resources and tools will be best placed to support novice traders and help them build confidence,” Vignati added.

Changes in Listed Derivatives Market

In the listed derivatives market, the number of retail traders has declined for the third consecutive year, but at a slower pace than previously observed. Notably, dormancy rates have fallen significantly, and client reactivations are on the rise. Investors are showing a growing preference for listed derivatives over CFDs, attracted by transparent pricing, better risk management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term, and the ability to make smaller trades.

A similar decline was also noted in the United Arab Emirates market, about which Investment Trends wrote in June. There, a decrease of 6% was reported.

“The increased reactivation of dormant traders, coupled with a growing preference for the simplicity and clarity of listed derivatives, signals an opportunity for brokers to capture more market share in France by focusing on transparency, trading ideas and strategies, reduced costs, and risk management tools. These are key differentiators in a competitive landscape,” noted Vignati.

French trader satisfaction has reached a six-year high, driven by improvements in decision-support tools and technological advancements. However, traders are calling for lower overnight funding costs, enhanced loyalty programs, and further advancements in charting and decision-support technology.