U.S. retail trading has increased significantly ever since the advent of app-based trading democratized access to stock markets. We saw another jump right around the start of Covid, just as most trading became commission-free and stimulus checks were distributed.
Interestingly, despite the “negative wealth effects” caused by the market sell-off after recent tariff announcements, we may be seeing activity rise again, with retail actually increasing their net buying.
Retail love buying ETFs
One feature we consistently highlight is that retail tends to net-buy exchange-traded funds (ETFs) most days. That’s reflected in this longer time series, too. Going back to 2019, our data suggests retail:
- Buys ETFs every single month (yellow).
- Wavers between buying and selling of company stocks (blue).
- Has been increasing their net buying – for both stocks and ETFs – in 2025.
Chart 1: Net retail trading has consistently, and increasingly, buying ETFs for at least the past six years
Retail gross trading is increasing, too
It seems intuitive that many “new” retail investors might be scared by the recent tariff-induced sell-off, and the declines in their portfolios.
The data shows that, instead of backing away from the stock market, retail has actually increased the value of their trading activity – for both ETFs and company stocks.
In the most recent data, the value of company stock trading outweighs ETF trading by around three-times.
Chart 2: Gross retail trading across ETFs and stocks
Retail is still a small portion of all market liquidity
Of course, as prices have risen over the past few years, and as volatility has increased recently, the whole market has been trading more value.
Adjusting for that, we see the increase in retail trade has mostly just kept pace with others in the market.
We also see that the value of retail trading seems surprisingly low (at less than 4% of value traded). Although, we would highlight that retail is likely a much larger part of ADV (or shares) traded. Thanks to their higher participation in lower-priced stocks, it takes 100-times more shares to invest $1 million in a $2 stock compared to a $200 stock.
Chart 3: Retail value trade as a percent of all trading
Even though retail love ETFs, their share of that trading is also low
Given that retail loves to buy ETFs, it’s worth looking at retail trading of ETFs separately.
However, although the data shows growth (rising from 5.2% to 6.4%), even that new percentage remains relatively low.
Chart 4: Retail trading of ETFs as a percent of all ETF trading is growing (but lower than you might expect)
Retail liquidity is getting bigger (but still not as big as it sounds)
Retail liquidity is growing and becoming a more substantial contributor to U.S. markets.
OECD data suggests direct holdings of stocks by U.S. investors are among the highest levels in the world, making retail investors an important source of capital for companies (even if that’s through ETFs).
Chart 5: U.S. has some of the highest household ownership of stocks in the world
But the U.S. market is very liquid – trading over $1.5 trillion (two-sided) every day. And as we’ve shown before, there is a lot of arbitrage and market making — within stocks and across asset classes — which keeps the U.S. market efficient.
At the end of the day, retail liquidity is important, but so too are all the other participants in the ecosystem.