Over the past five years, multiple factors have created a culture of personal investing that has spread to the stock market. The influx of retail traders was driven by opportunities in cryptocurrencies and prediction markets.
Individual investors are increasing their share of the stock market. This trend is most evident after the GameStop short squeeze event. 2021, 1 professional trader, former CFA keith gill It attracted many retail holders, pushed GME prices to record levels, and created a precedent in the market.
Since then, individual traders have become bolder and increased their exposure to the stock market. retail Bloomberg’s analysis shows that meme traders still exist, but they are gaining experience and choosing more rational strategies.
However, the financial nihilism caused by the GameStop scandal has also been felt by market participants. Retail investment expanded in response to expanding opportunities in the technology sector. The lessons learned from investing directly in cryptocurrencies transferred to the stock market as retailers sought to proactively manage their portfolios in a changing environment.
Retail investors show behavioral changes post-pandemic
From 2023 to 2025, retail investors returned to activity not seen since the post-pandemic market, according to JPMorgan Chase’s 2025 Investor Behavior Report.
Analysts said retail investors have become a more formidable force in the past few months. In 2025, retail investors have emerged as a key element of the market, moving beyond the early meme stock episode.
“Retail has more power in this space,” said Stephen Quirk, chief securities officer at Robinhood Markets. “I don’t think that’s going to change.”
Retail investors accounted for up to 20.9% of U.S. stock trading volume, up from 18.5% a year earlier, based on Bloomberg data. Institutional investors account for 30.2% of the market volume, but that gap is rapidly closing.
Individual traders use more sophisticated strategies
Individual traders are showing a shift towards derivatives markets. This trend continued with the expansion of new products in the cryptocurrency space as traders gained more risk experience. As the trading situation remains uncertain, individual traders are also participating in the options market instead of placing all-in bets.
Retail investors accounted for ~29.3% of options trading volume in the past quarter. In 2025, retail trade entered the picture to create options trading records, with over 50% of S&P500 options trading volume coming from retail trade.
Individual investors also resorted to a riskier form of zero-day options trading, which essentially predicts the movement of an index in the short term. The CBOE noted that zero-day options are becoming increasingly popular among retail investors. This behavior coincides with an influx of users to the prediction platform, offering even easier access and gamified trading.
Pressure on trader profiles is also reshaping the market. The move to 24-hour trading means up to 9% of stock market trades take place outside official business hours, up from just 1% in 2019. The lessons of international interest, free time investing, and even crypto trading with no exit time are already impacting the stock market, as traders seek similar flexibility.
Retail has also seen an influx in other types of investments, including the high-profile IPO market. They also caused a dramatic spike in stock trading for new entrants like Figma Inc. and Circle Internet Group Inc. The new wave of IPOs also appeals to younger investors who are more aware of a company’s value combination and some memetic potential.
