In the US Stock Market, Individual Investors' Trading Share Approaches 20% in the First Half of the Year

[Image source=AP Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] In the first half of this year (January to June), the proportion of individual trading in the total stock trading volume on the U.S. stock market reached 20%, marking the highest level in the past decade.

According to the Wall Street Journal (WSJ) on the 31st of last month (local time), data compiled by Bloomberg Intelligence (BI), a research institution under Bloomberg, showed that the share of individual stock trading volume in the U.S. stock market was 19.5% in the first half of this year, the highest since statistics began in 2010. This is double the level of 2010 (10.1%) and nearly 5 percentage points higher than last year (14.9%).

WSJ explained that the widespread use of free stock trading applications (apps) like Robinhood, the surge in technology stocks reminiscent of the 1990s dot-com boom, and the impact of the COVID-19 pandemic contributed to this trend. Additionally, major online brokerage firms including Charles Schwab lowered stock trading commissions to 'zero (0)' in the latter half of last year, which also had an effect.

As novice retail investors flocked to Robinhood and moved based on irrational decisions, causing market fluctuations, this phenomenon has been termed the 'Robinhood effect.' Stocks such as Eastman Kodak, Nikola, and Novavax are analyzed to be significantly influenced by individual trading activity.

The influx of individual investors into the stock market is not unique to the U.S. WSJ emphasized that unlike the U.S., which is centered on institutional investors, Asian stock markets have seen active individual trading. In particular, the Chinese and Korean stock markets have recently seen individual trading proportions exceed 80%, with Professor Ahn Heejun of Sungkyunkwan University analyzing that the individual trading proportion in this year’s KOSPI market approaches 84%.

This content was produced with the assistance of AI translation services.