In the past five years, multiple factors created a culture of retail investment, spreading to the stock market. The inflow of retail traders got a boost from crypto and the opportunities of prediction markets.
Retail investors have increased their share on the stock market. The trend is most notable following the GameStop short squeeze event. In 2021, one professional trader and former CFA Keith Gill drew in a crowd of retail holders, pushing the GME price to a record and creating a precedent on the market.
Since then, retail traders have become more bold, increasing their exposure to the stock market. Retail and meme traders are here to stay, based on a Bloomberg analysis, but they are also gaining experience and picking more reasonable strategies.
Yet the streak of financial nihilism from the GameStop debacle also informs market participants. Retail investment expanded in response to growing opportunities in the tech sector. The lessons from direct investment in crypto also shifted to the stock market, as retail attempted at actively managing their portfolios in a shifting environment.
Retail investors show post-pandemic behavior changes
According to a report for investor behaviors in 2025 by J.P. Morgan Chase, between 2023 and 2025, retail investors returned to activity not seen since the post-pandemic market.
Analysts noted in the past months, retail investors became an even more formidable force. In 2025, retail investors emerged as a heavyweight factor on the market, going beyond the meme stock episodes in earlier years.
“Retail is more of a force in this space,” said Steven Quirk, chief brokerage officer of Robinhood Markets Inc. “I do not see that changing,” he said.
Retail investors account for up to 20.9% of US equity trading volume, based on Bloomberg data, up from 18.5% for the same period last year. Institutions make up 30.2% of the market volume, but the gap is quickly closing.
Retail traders use more sophisticated strategies
Retail traders have shown a shift to derivative markets. The trend followed the expansion of new products in crypto space, as traders gained more experience of risk. Instead of all-in bets, retail traders are also participating on options markets, as trading conditions remain uncertain.
Individual investors made up to 29.3% of options volume in the past quarter. Retail moved in to create options trading records in 2025, while over 50% of the S&P500 options volume was due to retail.
Retail investors also resorted to a risky form of trading zero-day options, which are essentially a short-term prediction on the index movement. CBOE noted zero-day options are growing in popularity among retail investors. That behavior coincides with an inflow of users to prediction platforms, offering even easier access and gamified trading.
Trader profile pressures are also reshaping the market. The shift to a 24-hour trading means up to 9% of equity market trades take place outside official opening hours, up from just 1% in 2019. Overseas interest and free-time investing, along with the lessons of crypto trading with no closing hours is already affecting the equity market, as traders require the same flexibility.
Retail has also flowed into other types of investment, including the high-profile IPO market. They also caused dramatic spikes in stock trading for newcomers like Figma Inc. and Circle Internet Group Inc. The new wave of IPOs also appeal to younger investors, more aware of the companies’ mix of value and to a degree, their meme potential.
Join a premium crypto trading community free for 30 days - normally $100/mo.
