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Online brokerages have seen a record number of new accounts opened this year as so-called mom and pop retail investors look to buy the dips and cash in on the market's late February selloff.
What's happening: "The rush of retail investors into U.S. equities is at least partly a function of a world with no casinos, no sports betting to speak of (horses and ping-pong aside), and little to do outside the home," DataTrek Research co-founder Jessica Rabe points out in a note to clients.
- Retail traders, especially those using the stock trading app Robinhood, have shown unusual buying patterns, pursuing cheap and particularly volatile stocks, she observes.
By the numbers: "TD Ameritrade said last week that retail clients opened a record 608,000 new funded accounts in the quarter ended March 31, with more than two-thirds of those opened in March," WSJ reports.
- "E*Trade saw a net gain of 363,000 accounts in the quarter — a company record — around 90% of which were retail."
- "Charles Schwab Corp. reported a record 609,000 new brokerage accounts in the quarter, including individuals’ self-directed accounts and those managed by financial advisers."