How Many Retail Traders Are There?

The financial markets have undergone substantial changes, with individual investors playing an increasingly prominent role. Once largely dominated by large institutions, the market now sees significant participation from everyday individuals. This article explores the scope of this individual involvement, examining who these investors are, their market presence, the factors driving their participation, and the methods used to measure their activity.

Defining Retail Trading

Retail trading refers to the activity of individual investors who buy and sell securities for their own personal accounts. These individuals are distinct from institutional investors, who manage large pools of capital on behalf of organizations such as pension funds, mutual funds, hedge funds, or insurance companies. While institutional traders often deal with significantly larger volumes and have access to more complex financial instruments like forwards and swaps, retail traders typically operate with smaller amounts of capital. They engage in the market through brokerage firms, investment advisers, or direct investment platforms, including mobile trading applications.

Common instruments associated with retail trading include stocks, bonds, exchange-traded funds (ETFs), options, and increasingly, cryptocurrencies and forex. Retail investors are often motivated by personal wealth building, such as saving for retirement or purchasing a home. The precise definition of a “retail trader” can sometimes vary depending on the context or data source, which influences how their numbers are quantified and reported.

Current Landscape of Retail Trading

The presence of individual investors in financial markets has grown considerably, particularly since 2020. Retail investors currently account for a substantial portion of overall trading volume in the United States, with estimates generally ranging between 15% and 25%. By 2021, retail investors comprised 25% of total equities trading volume, nearly double the percentage reported a decade prior.

More recent data continues to highlight their influence, with retail investors estimated to account for about 20.5% of daily U.S. equity trading volume in mid-2025. This represents a significant increase from approximately 10% a decade earlier. Brokerage firms have reported substantial growth in customer accounts; for instance, Robinhood reports 25.6 million funded customer accounts. Approximately 30 million new retail investors opened brokerage accounts in the U.S. in the two years leading up to February 2023.

Beyond equities, retail participation is also evident in other markets; the number of retail margin forex traders in the US grew by 11% to 186,000 active traders in the last 12 months, up from 167,000 in 2023. The average age of a retail investor is now around 33 years, reflecting a demographic shift towards younger participants in the market.

Factors Influencing Retail Trader Participation

Several factors have contributed to the increased participation of retail traders in financial markets. Technological advancements, particularly the rise of commission-free trading applications, have significantly lowered the barriers to entry for individual investors. Platforms like Robinhood and Webull have seen consistent growth due to their ease of use and zero-commission trades, which have democratized access to investing. The elimination of traditional transaction fees has encouraged more frequent trading and made it easier to invest smaller amounts.

Increased access to information and financial education has also played a role in empowering individual investors. The widespread availability of investment data and analysis, combined with a growing focus on financial literacy, allows more people to engage in self-directed investing. Social media has emerged as a powerful influence, with platforms like Reddit and X (formerly Twitter) serving as sources for real-time market sentiment and stock tips. Online investing communities, such as WallStreetBets, have grown to millions of members, fostering collective action that can influence market prices, as seen with meme stocks.

Economic conditions have further propelled retail trading activity. During periods like the COVID-19 pandemic, factors such as government stimulus checks, low interest rates, and increased free time led many individuals to explore stock investing. Cultural shifts towards self-directed investing and a growing interest among younger generations in managing their own finances have also contributed to this trend.

Measuring Retail Trading Activity

Quantifying the number of retail traders and their market activity involves various methodologies and data sources. Information is often derived from brokerage firm reports, which provide insights into account openings and customer demographics. Exchange data, such as Nasdaq’s U.S. Retail Equities Flow (UREF) and Retail Trading Activity Tracker (RTAT), offers timely insights by tracking billions of dollars in daily retail flows across a wide range of U.S.-traded stocks, American Depositary Receipts (ADRs), and exchange-traded products (ETPs). Regulatory filings and academic studies also contribute to the overall understanding of retail participation.

Key metrics used to gauge retail activity include trading volume, which represents the total number of shares bought and sold, and the number of individual trades executed. The notional value, or the dollar value of trades, provides another dimension for understanding the actual monetary size of retail involvement.

Despite these methods, accurately measuring retail trading numbers presents several challenges. Varying definitions of what constitutes a “retail trader” can lead to discrepancies across different reports and studies. The existence of dormant accounts, which are opened but not actively traded, can inflate reported numbers of participants. Additionally, individuals may hold multiple trading accounts across different brokerage firms, making it difficult to ascertain a unique count of retail traders.