Retail Investors Outperform Pros, Account for $5.4 Trillion in 2025 Trading

Retail trading activity surged 47% in 2025 as new investors flocked to the markets, dispelling the 'dumb money' myth.

Published on Feb. 23, 2026

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Retail investors accounted for a record $5.4 trillion in trading activity across stocks and ETFs in 2025, a nearly 47% increase from the previous year. This retail trading boom, fueled by the rise of mobile apps, zero-commission trades, and online investing communities, has helped retail investors outperform some of the most popular professionally managed index funds. The COVID-19 pandemic was a key inflection point, as a new generation of young investors joined the markets, driving the 'meme stock' frenzy. Retail investors have proven adept at 'buying the dip' during market downturns, showcasing their growing influence and sophistication.

Why it matters

The surge in retail trading activity has upended the traditional Wall Street dynamic, where institutional investors once dominated the markets. Retail investors are now a major force, accounting for nearly half of all trading volume. This shift has implications for market dynamics, volatility, and the performance of both individual stocks and broader indexes. It also highlights the democratization of investing, as new tools and platforms have empowered more Americans to participate directly in the markets.

The details

Retail investors accounted for $5.4 trillion in trading activity in 2025, a 47% increase from the previous year. This includes trading in both stocks and exchange-traded funds (ETFs). The rise of mobile trading apps, zero-commission trades, and online investing communities have all contributed to the surge in retail participation. Retail investors have proven adept at 'buying the dip' during market downturns, such as in April 2025 when they bought over $5 billion in stocks after a sharp market sell-off. Retail traders have also been active in options trading, which accounted for about $650 billion of their activity last year.

  • In April 2025, retail investors bought over $5 billion in stocks during a market sell-off triggered by new tariffs.
  • On October 10, 2025, retail investors were major buyers on a day the market dropped 2.7% after new tariff threats.
  • Retail trading activity hit an all-time high on a rolling monthly basis in January 2026.

The players

Joe Mazzola

Head trading and derivatives strategist at Charles Schwab.

Steve Sosnick

Chief strategist at Interactive Brokers.

Frank Sabia

A high school registrar from Encino, California who started investing in 2018 and now trades options and other assets independently.

Noah Goodwin

A junior in high school in Castaic, California who started options trading on Robinhood Markets in 2025 using his mother's custodial account.

Andy Hu

A financial analyst in Los Angeles who balances higher-risk short-term trades with a long-term investment portfolio.

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What they’re saying

“I personally want to dispel the myth of retail being dumb money, because it's not dumb money anymore.”

— Joe Mazzola, Head trading and derivatives strategist at Charles Schwab (Charles Schwab)

“I would say they are considerably more important as a force in markets right now. Markets used to be really dominated by institutional investors, but if you put enough ants together, they can move a very big log.”

— Steve Sosnick, Chief strategist at Interactive Brokers (Fortune)

“In April, it was retail (investors) that bought the dip. They were the ones that were willing to step in front. They saw the opportunity.”

— Joe Mazzola, Head trading and derivatives strategist at Charles Schwab (Charles Schwab)

“The risk to it is that for many of them it's become sort of mechanical.”

— Steve Sosnick, Chief strategist at Interactive Brokers (Fortune)

What’s next

The judge in the case will decide on Tuesday whether or not to allow Walker Reed Quinn out on bail.

The takeaway

This surge in retail trading activity highlights the growing power and sophistication of individual investors, who are no longer dismissible as 'dumb money.' The rise of accessible trading platforms and online investing communities has democratized the markets, empowering more Americans to participate directly and potentially outperform some professional fund managers.