It’s one of the year’s biggest market stories: Mom-and-pop investors have fallen back in love with stocks, lured by free trading apps, a resurgent bull market led by technology companies and a pandemic that has left millions of Americans at home with little to do.
New data show a number of ways in which the individual-trading boom has reshaped the U.S. stock market. Here are five takeaways:
Individual stock trading is at a decade high
Trading by individuals accounts for a greater chunk of market activity than at any time during the past 10 years, according to Larry Tabb, head of market-structure research at Bloomberg Intelligence.
During the first six months of this year, individual investors accounted for 19.5% of the shares traded in the U.S stock market, up from 14.9% last year and nearly double the level from 2010, Mr. Tabb estimates. His data don’t go back further.
On some days this year, about 25% of market volume has been individual-investor activity, said Joe Mecane, head of execution services at Citadel Securities, an electronic-trading firm that executes orders for such brokerages as Robinhood Markets Inc. and Charles Schwab Corp.