China Has a Lesson for Robinhood Traders in the U.S.
A rising share of retail investors would be a good thing for Wall Street. No one knows that better than mainland traders.
Who wants a ride?
Photographer: Brian Killigrew/Bloomberg
Covid-19 has awoken an army of retail investors. They now account for a fifth of the U.S. stock market’s volume, doubling their presence from a decade earlier. Day traders are even dabbling in exotic products, from thematic exchange-traded funds to short-dated call options on Big Tech stocks.
This is a remarkable shift in market composition. Judging by turnover, leverage deployed and new account openings at online brokerages such as Robinhood Markets Inc., the U.S. is starting to resemble China, where retail investors can account for as much as 80% of total trading.