What it is
A retail investor, also known as an individual investor, typically trades smaller volumes of securities compared to institutional investors. They make investment decisions for their own financial goals, such as retirement, savings, or wealth accumulation. These investors access markets through brokerage accounts, often using online trading platforms or robo-advisors, and their trades are usually subject to standard commission structures and regulations.
Retail investors collectively exert significant influence on market dynamics, particularly in the era of online trading and social media. Their activity can drive momentum in certain stocks, especially meme stocks, or contribute to market volatility. Following retail sentiment, often gauged by trading volumes in popular stocks or discussions on online forums, helps understand market trends and potential short squeezes.
Why it matters
You are likely a retail investor, and understanding your collective impact on markets, especially in trending stocks, is crucial. Their activity can move prices.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice