Retail Investor
A retail investor is an individual investor who trades securities in small quantities on their own behalf, rather than on behalf of a large institution. Retail investors typically purchase stocks, bonds, mutual funds, exchange-traded funds (ETFs), and other investment products through a brokerage or other financial intermediary. Retail investors are often referred to as “mom and pop” investors, as they are typically small-scale investors who are not affiliated with large financial institutions.
History of Retail Investors
The concept of retail investors has been around since the early days of the stock market. In the late 19th century, the New York Stock Exchange (NYSE) was the primary stock exchange in the United States. At the time, only wealthy individuals and large financial institutions were able to participate in the stock market. However, in the early 20th century, the NYSE began to open its doors to smaller investors, allowing them to purchase stocks in smaller quantities.
Since then, the concept of retail investors has grown significantly. In the late 20th century, the advent of online trading platforms made it easier than ever for retail investors to purchase stocks and other securities. Today, retail investors are a major force in the stock market, accounting for a significant portion of all trading volume.
Comparison of Retail Investors and Institutional Investors
| Retail Investors | Institutional Investors |
|---|---|
| Small-scale investors | Large-scale investors |
| Purchase securities in small quantities | Purchase securities in large quantities |
| Often referred to as “mom and pop” investors | Often referred to as “whales” |
| Account for a significant portion of trading volume | Account for a majority of trading volume |
Summary
Retail investors are individual investors who purchase securities in small quantities on their own behalf. They are often referred to as “mom and pop” investors, as they are typically small-scale investors who are not affiliated with large financial institutions. Retail investors are a major force in the stock market, accounting for a significant portion of all trading volume. For more information about retail investors, visit the websites of the Securities and Exchange Commission (SEC) or the Financial Industry Regulatory Authority (FINRA).
See Also
- Institutional Investor
- Stock Market
- Mutual Funds
- Exchange-Traded Funds (ETFs)
- Brokerage
- New York Stock Exchange (NYSE)
- Securities and Exchange Commission (SEC)
- Financial Industry Regulatory Authority (FINRA)
- Online Trading Platforms
- Whales
