The Changing Landscape of Retail Investors

The global pandemic has upended most things in our lives from how we work to how we learn, how we see friends, and pretty much every aspect of business as well. Retail investors aren’t immune to these changes. COVID-19 has created the “at home” workspace and investors and traders have increased freedom to trade and follow the markets more than ever before.

Besides the market disruptions due to COVID-19, changes in investing have been coming for a long time, including the fact that retail investors now account for roughly 20% of stock-market activity on average and nearly one-quarter of trades on peak days. Some of the biggest changes include: 

• Ease of access to the markets
• 24/7 access to news
• Great, comprehensive trading platforms like TradeHawk
• Cost to trade stock and options has come down
• Massive expansion of option and stock educators and mentors available over the internet
• With education comes massive amounts of good content that makes trading decisions easier

Traders are adapting to these changes by changing their trading patterns. For example, with lower costs, traders are able to trade more and not generate massive commission bills. They also have greater access to the tools that the pros use, this makes their trading decisions a lot easier. Because of new, dynamic trading platforms, traders can use technicals from charts to create trades based on the picture they see.

The future of retail investment 

As for the future of retail investment, greater access with better tools combined with great education and mentoring will create confidence which equals more volume and more trading. Much of the new trading activity is concentrated in options contracts. The derivatives allow investors to leverage long and short positions in the stock market, adding volatility to an already choppy environment. The growing proportion of options trades reflects an increase in retail investors' knowledge and access to complex investment products. There are also new apps and trading tools that make trading and decision making easier and faster than ever. Going forward, we will see more and more individuals with brokerage accounts will be able to manage some portion of their assets themselves, so the self-directed trading world will continue to grow.  Add to this concept, the fact that many people can access their accounts from a smartphone means the ease to make trading decisions is at your fingertips.

Ever-evolving Landscape

Like all things in life, nothing stays the same forever and neither will the landscape we’re currency seeing for retail investment. It will be interesting to see even further changes over the next 6-12 months with life continually evolving with COVID-19, an election year, and likely more changes to come.

The Tradier platform makes all of these changes and the changes you want to make in your investments simple and easy. Learn more.