5 charts showing how ‘dumb money’ is transforming the stock market, as retail traders smash Wall Street records
The retail-investor takeover of the U.S. stock market has reached a fresh milestone over the past couple of months, according to a top strategist at Citadel Securities.
May and June shattered the previous monthly records for individual investors’ trading activity, according to Scott Rubner, head of equity and equity-derivatives strategy at Citadel. During this period, trading by these investors was 65% above 2025 levels, and more than double the 2024 average.
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The biggest day for retail activity on record, according to Citadel, was June 12 — the day SpaceX SPCX went public. Nine of the 10 most active trading days for the retail crowd have been observed over the past two months; seven of those days occurred during the month of June alone.
Many on Wall Street have long derided the retail crowd as “dumb money” — a reputation largely earned during the dot-com bubble, and reinforced during the 2021 meme-stock frenzy.
Retail investors’ increasingly active approach to trading the markets could create more of a buffer for equity prices, Rubner said, given their tendency to swoop in and buy on weakness.
“Retail participation has evolved from a cyclical phenomenon into a structural feature of modern markets, providing a persistent source of demand across U.S. equities,” Rubner said. Citadel executes roughly 35% of all retail order volume in the U.S., making it the largest market maker trading against this cohort. According to Rubner, this gives the hedge fund and market-making giant unique insights into the cohort’s growing influence over the broader market.
Last year, retail investors rushed to buy the dip in stocks during the April tariff tantrum, beating many Wall Street professionals to the punch.
See: Everyday investors keep making Wall Street pros look dumb with this one simple move
That instinct to buy on pullbacks has persisted in 2026. In fact, the level of dip-buying activity among the retail crowd reached the strongest level on record in Citadel’s data set over the past six months. On days when the S&P 500 SPX fell, the retail crowd bought three-and-a-half times as much stock compared with an average day. They were buyers on days when the index rallied, too — but only at one-and-a-half times the average rate.
It’s not just stocks, either. Retail trading in the options market has also exploded, according to Rubner.
Retail investors traded roughly $6.8 billion of options premium per day in June on Citadel’s platform — 17% above the previous record set in May, 65% above the 2025 average and more than double the historical average.
During previous bouts of retail-trading mania, the cohort overwhelmingly favored shares of risky meme stocks like GameStop GME. That has started to change, according to Rubner, though meme-stock frenzies still crop up from time to time — the recent surge in shares of Wendy’s WEN being one notable example.
But increasingly, the retail crowd is favoring sectors and themes that have been driving much of the gains at the index level. In June alone, retail investors traded $1.9 billion of semiconductor options premium per day — six times more than the historical average — with about 75% of that activity concentrated in call options.
Aside from options, the retail cohort has also gravitated toward another product with embedded leverage: Leveraged exchange-traded funds. Assets under management in these ETFs have soared in 2026 to the highest level on record, Rubner noted.
Heavy use of leverage has been widely credited with helping to fuel the propulsive stock-market rally seen during the second quarter. But according to Rubner, all of this demand has been putting upward pressure on equity financing spreads.
Buying the dip has produced mixed results for investors over the long sweep of stock-market history. But more recently, the strategy has looked like a smart play for investors.