European Retail Investor Optimism Fuels Record Interest in IBEX 35

Trading Systems
15.11.2023 09:15 am

Spectrum Markets (“Spectrum”), the pan-European trading venue for securitized derivatives, has published its SERIX sentiment data for European retail investors for October, revealing a sharp increase in sentiment towards the IBEX 35 index, marking a two-year high of 114 points. The Spanish benchmark index IBEX 35 comprises the 35 most traded Spanish stock corporations traded on the Madrid Stock Exchange.

The SERIX value indicates retail investor sentiment, with a number above 100 marking bullish sentiment, and a number below 100 indicating bearish sentiment. (See below for more information on the methodology).

Market opinion

“The IBEX 35 hovered around 9,000 points towards the end of October, after hitting several peaks above 9,500 points throughout the year. Retail investors may have seen this as a potential entry point, leading to a two-year high SERIX sentiment on IBEX 35, with 114 points, indicating a clear bullish sentiment on the Spanish index,” explains Michael Hall, Head of Distribution at Spectrum.
“Despite the complex political scenario in Spain, the forecasts for strong corporate earnings in Q3 have been positive, particularly for financial companies, which are heavily represented in the IBEX 35. This, together with the market's expectations of ECB interest rate hikes coming to an end, likely played a role in driving bullish sentiment towards the Spanish index," concludes Michael Hall.

Spectrum’s October data

In October 2023, 179 million securitized derivatives were traded on Spectrum, the highest-ever volume of instruments traded on the venue, with 34% of trades taking place outside of traditional hours (i.e., between 17:30 and 9:00 CET).

88.8% of the traded derivatives were on indices, 7.1% on currency pairs, 2.7% on commodities, 1.3% on equities, and 0.1% on cryptocurrencies, with the top three traded underlying markets being DAX 40 (31.3%), S&P 500 (22.8%), and NASDAQ 100 (18.9%).

Looking at the SERIX data for the top three underlying markets, the DAX 40 remained neutral at 100, the S&P 500 decreased slightly from 108 to a consistently bullish 105, and the NASDAQ 100 also saw a slight decrease but remaining bullish at 101.

Calculating SERIX data

The Spectrum European Retail Investor Index (SERIX), uses the exchange’s pan-European trading data to shed light on investor sentiment towards current development in financial markets.

The index is calculated on a monthly basis by analysing retail investor trades placed and subtracting the proportion of bearish trades from the proportion of bullish trades, to give a single figure (rebased at 100) that indicates the strength and direction of sentiment:

SERIX = (% bullish trades - % bearish trades) + 100

Trades where long instruments are bought and trades, where short instruments are sold, are both considered bullish trades, while trades where long instruments are sold and trades where short instruments are bought are considered bearish trades. Trades that are matched by retail clients are disregarded. (For a detailed methodology and examples, please visit this link).