China's Day Trading Hordes Unmasked

There's been no shortage of coverage both here and elsewhere of China's world-beating, margin debt-fueled, self-feeding equity mania. The inexorable rally has Shanghai trading up more than 100% over the course of the last 18 months and now, with new regulations paving the way for the southbound flow wherein mainland investors unsatisfied with the "value" proposition offered on the Shanghai exchange can search for "bargains" in Hong Kong-listed shares, the bubble has spilled over onto the Hang Seng causing shares of HKEx to go “interstellar.” 

Although we know that 3.2 million stock trading accounts were opened in just the first two weeks of April alone (on top of 4 million in March), and although Bloomberg recently gave us a window into the world of the Chinese day trader, we were still left wondering: who are all of these newly minted “investors” whose ranks are now so large that their trades literally broke the software that tracks volume on the Shanghai Exchange today? 

We did some digging and we now have our answer: