Something remarkable happened in the first half of 2025, and especially the 2nd quarter - at a time when most institutional and hedge fund investors had staged a buyers strike, or were actively pressing shorts, retail investors did that they always do after the S&P tumbled into Trump's liberation day, and the subsequent crash: they BTFD with a frenzy not seen since the days of the Jan 2021 meme stonk explosion. 

We first noted this last month when we said that "Retail has gone full tilt, trading more aggressively than during the post-stimmy meme stonk euphoria", and pointed out that pennystocks (i.e., "sub-dollars") had just hit a record 47.4% of total market volume according to Goldman.

Retail has gone full tilt, trading more aggressively than during the post-stimmy meme stonk euphoria.

Pennystocks just hit a record 47.4% of total market volume pic.twitter.com/NfdDzODJVY

— zerohedge (@zerohedge) June 16, 2025

This week, the retail flow trading gurus at Vanda Research confirmed as much, writing in their weekly update that retail activity and participation hit a record high in the first half of 2025, with self-directed investors adding US$155.3bn in single-stock and ETF flows — surpassing previous first-half peaks from 2021 and 2022. Repeating our previous observations, Vanda notes that retail’s dip-buying bias is fully intact, and engagement with single names — particularly high-beta and leveraged plays — continues to rise. Finally, with performance holding up, risk appetite is anything but shy, and even the most modest dips are immediately bought pushing stocks even higher.

Let’s dive in for the details.

1. Retail buying of stocks and ETFs hits a new record in 1H 2025. According to Vanda, retail flows into US stocks and ETFs surged to a new high in 1H 2025, reaching US$155.3bn, the strongest first-half on record. Strength in flows was driven by the “American Exceptionalism” narrative first and later by aggressive dip-buying around Liberation Day. This level of participation surpasses previous 1H records set during the meme-stock boom of 2021 and the early phases of the 2022 bear market.

2. Below the surface, purchases of single stocks drove the rebound. The next chart shows that while purchases of ETFs have continued to gradually increase over the past three years, they’ve yet to revisit the levels seen during the 1H 2022, That's because ETFs remain largely a hedging vehicle for institutions to offset the other side of (mostly bullish) single stock exposure. In contrast, purchases of single stocks in the first half of 2025 returned to highs last seen during the bullish 1H of 2021 and 2023.

3. Activity levels point to historic engagement. Perhaps the most notable aspect of retail activity in the first half is that as the table below shows, not only investors have purchased more stocks than usual on a daily basis in 2025, but daily turnover – i.e., buys plus sales – has jumped a staggering 44.5% vs 2024 daily averages. Should this pace of net purchases and total turnover sustain for the rest of the year it would mark a new record for retail participation.

4. Retail’s propensity to buy dips remains strong. The lines in the chart below reflect the relationship between daily changes in the S&P 500 (SPX) and daily net inflows by mom-and-pop traders broken down by year. The more negatively steep the lines are, the more aggressive dip-buying attitudes are. 

While less aggressive than in 2021, retail's propensity to buy dips remains high in 2025. Indeed, the slope of the flow-vs-price-change relationship is -US$100mn per 1% SPX move, below 2021's -US$187mn, but still a clear sign the BTD mentality is intact. This may also be due to the fact that there have barely been any dips in the first half: true the market tumbled briefly, but it was for a total of 3-4 days; the rest of the time stocks have been rebounding.

5. NVDA, TSLA, PLTR dominate 2025 inflows so far. Nvidia (NVDA) remains atop the list of most-favored stocks by retail investors, meanwhile Tesla (TSLA) has so far regained the #2 spot on the leaderboard. Palantir (PLTR) is one of the biggest advancers both in terms of purchases (+US$5.8bn) and ranking (#4). Ford (F) is a re-entry in the top 20, likely driven by speculation around auto tariffs. And lastly, Direxion’s 2x Bull Tesla ETF (TSLL) enters the top 20 — the first single-stock leveraged ETF to do so.

6. Sticking with leveraged ETFs, there has been a change in preference (directionally) from broad-based vehicles to single-name ones. Indeed, the charts below show that total retail purchases of broad-based leveraged ETFs are still in the lead, but the growth of overall flows in single-stock products remains steep.

7. Retail portfolios are, so far, keeping up with the S&P 500. In 1H 2025, retail portfolios trailed the Nasdaq by ~2% but stayed in line with the S&P 500. Returns don’t particularly stand out relative to other first halves, but they’re not lagging materially either. What is notable, is that retail portfolios are comfortably in the green and ahead of QQQ and SPY when looking at cumulative performance since 2024 (+40% for retail vs +34% for QQQ, and +32% for SPY); remarkably, retail is vastly outperforming the average hedge fund. 

8. The share of retail’s ownership across their most concentrated positions. As the table below illustrates, most stocks saw retail’s share of ownership increase in 1H of 2025. With the exception of Carvana, stocks with already-elevated retail ownership saw retail’s share increase the most (TSLA, AMD, PLTR).

9. Portfolio allocation shifts mainly reflect security-level performance dynamics. According to Vanda, Individuals’ trading portfolios remain skewed toward big tech. That said, the largest changes so far in 2025 appear to be driven by price performance. That’s particularly true for TSLA, where despite being the second-most bought security this year, its -21% YTD return has contributed to an allocation decline among retail portfolios of about 3.3% vs the start of the year. Similar fate for Apple (AAPL), even though the stock jumped to #2 rank among retail portfolios. NVDA and PLTR meanwhile, were the biggest allocation gainers driven by positive performance and sustained buying.

10. Lastly, for those wondering about current sentiment, recent retail activity remains euphoric, particularly among the smaller cap high-beta names. The table below captures the stocks that are seeing the largest levels of retail turnover relative to total turnover in the past month. Crypto-adjacent and regional bank stocks top the list.

Shifting away from Vanda to JPMorgan's latest Retail Radar note for a more in-depth look in the latest market trends, we find that over the past week when stocks finally recaptured their February all time highs (and melted up higher), retail activity picked up further, with net buying of $8.4B in cash equities. Notably, June 30th saw a sharp spike in demand, with daily net buying exceeding $3BN - a level not seen in over a month - likely driven by month-end dynamics and the Russell rebalance. The weekly inflows were dominated by ETFs ($5.4B).

Within ETFs, they showed renewed interest in tech (QQQ +2.5z, XLK +3.9z), while momentum strategies like SPMO also gained traction. Modest buying was also observed in financials (XLF +0.6z) ahead of last week’s CCAR results.

In stocks, retail net bought $3.1BN, led by TSLA (+$961Mn), PLTR (+ $722Mn), AMZN (+$456Mn), and NVDA (+$449Mn). Despite the increasing weight of the Mag7 within the S&P 500, retail investors have gradually reduced their allocation to the group since the start of the year. Sentiment toward the Mag7 has also cooled, dropping back to its long-term media. And while bearish positioning has picked up across much of the broader S&P, short interest in Mag7 names has dropped to an 18-month low.

Retail activity in options remained elevated, selling -$2B of delta and a record -$46B of gamma this week. Despite the large outflow from 0DTE options, there were structural shifts in short-dated trading on S&P calls from April to June: retail became net buyers of 1D–1W options while turning to net sellers of 8D–1M options, hence they contributed to the elevated short-dated call skews.

Additionally, retail’s market share in GLD option trading recently rose to a session high ~21% and the sentiment score jumped to 2.8, far above the 6% market share with 0.4 sentiment in GLD cash trading

Bottom line: Retail investors remain a major, and growing, force in the market. Participation is at record highs, the dip-buying bias is fully intact, and engagement with single names — particularly high-beta and leveraged plays — continues to rise. Performance is holding up, and risk appetite is anything but shy. Nothing seems to stop this retail train.