Small Investors’ Market Involvement Drops Back To Pre-Pandemic Levels

Small Investors’ Market Involvement Drops Back To Pre-Pandemic Levels
Andrew Rummer

over 2 years ago1 min

Mentioned in story

As the number of coronavirus cases declines and life slowly returns to normal for many parts of the world, smaller investors seem to be finding better things to do with their time than trading stocks. 

As you can see from the top panel in the chart, the proportion of trading attributable to so-called retail traders has fallen to about 4% of total volume for S&P 500 stocks – down from more than 10% in April 2020, during the strictest days of lockdown. The bottom panel shows that retail options trading has also dropped back, following a similar but smaller lockdown-inspired bump. 

Investment bank Goldman Sachs, which published this data in a report last week, defined a small stock market trade as one worth less than $2,000 and a small options trade as worth less than $5,000.

After a year in which the actions of small traders have dominated commentary around financial markets – from the “meme stock” craze to the surge in crypto trading – it appears their influence may be on the wane.



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