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J.P.Morgan: Signs Of Waning U.S. Retail Participation


J.P.Morgan note that “the release of more comprehensive quarterly data on transactions between retail brokers and third-party market OTC venues revealed a decline in the share of retail investors in U.S. stock trading in December, to its lowest level since the pandemic at 14.1%, breaching the 15.6% seen in September 2020. Robinhood's share fell sharply in December to levels last seen before the pandemic. A variety of metrics ranging from the share of retail investors in U.S. equity trading, the flow into call options on U.S. individual stocks by small option traders, the relative performance of equity baskets containing stocks popular with U.S. retail investors and our leverage proxy based on NYSE margin accounts, point to waning U.S. retail impulse into equities. However, this waning picture is not yet seen in the equity fund space, as last year’s strong impulse into equity funds appears to be continuing so far in 2022.”

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