Retail Trading Insights

Retail Trading Insights in Equities and Options
 

Equities Exchange Highlights

The SEC recently launched a new statistics page, including various capital markets metrics. The data show a rise in the number of U.S. households’ holding stock, which grew from 58.6 million (50% of households) in 2010 to 76.1 million (58% of households) in 2022.

The broad adoption of commission-free equity trading in 2019 accelerated the increase in household participation, up 14% from 2019 to 2022. MEMX estimates the number of households holding stock at ~80 million (60% of total) in 2025 based on a linear trend.

Note: Stock holdings include directly and indirectly held stocks. Directly held stocks include stocks issued by individual company. Indirectly held stocks include stock mutual funds, IRAs/Keoghs invested in stocks, other managed assets with equity interest invested in stock, and thrift-type retirement accounts invested in stock 

Below shows retail wholesaler market share was 34% in June 2025, up from 27% in January 2024.  

In market share by category, exchanges accounted for 48% of volume, while off-exchange market share included 34% from retail wholesalers (non-ATS), 11% from ATSs, and 7% from other (non-ATS).

Most retail activity occurs off-exchange on wholesalers, but exchanges typically handle retail non-marketable limit orders. Piecing it all together, we estimate retail investors account for 30% to 37% of daily trading volume, depending on the market environment. Sub-$1 activity comes mostly from retail and typically ranges between 10% – 20% of industry volume, with significant month-over-month variability.

While it may be reasonable to assume that looking at odd-lot trades (typically less than 100 shares) is a good way to gauge the level of retail trading, it is not a great measure.

Automated algorithms used by professionals frequently execute orders in odd lots, making it harder to distinguish between retail, institutional, and market-maker activity. Additionally, as stock prices rise, this naturally leads to more odd-lot trading. The percentage of trades in odd lots increased steadily from 57% in January 2023 to 66% in August 2025. Looking at odd-lot trends in three popular retail stocks (TSLA, NVDA, PLTR) highlights how significant changes in stock price levels can impact odd-lot behavior.

Options Exchange Highlights

Figure 5 shows the percentage of industry options volume by capacity segment in August 2025. Market Makers accounted for 49.4% of volume, followed by Customers at 45.8%, and Firms at 4.8%. Customers include retail investors and institutional investors (e.g., hedge funds, asset managers, pension funds, and mutual funds).

Over the past year, the Customer mix ranged from 43% – 46% of volume. What portion of this activity is retail? Looking at option trade sizes of 10 contracts or fewer can provide insight into retail activity. The percentage of industry contracts of 10 contracts or fewer was 30.2% in August 2025, up from 27.4% in January 2023.

On MEMX Options, activity from the largest retail brokers accounted for nearly 27% of volume in August 2025, with a mix of 55% liquidity adding and 45% liquidity taking. MEMX Options saw significant retail activity of nearly 40% in SPY 0DTE short-dated contracts. Retail was also very active in QQQ and many single-stock options (NVDA, TSLA, AAPL, AMD, OPEN, PLTR, AMZN).