Retail Investor
An individual non-professional investor who buys and sells securities for their own personal account.
What is Retail Investor?
A retail investor is an individual, non-professional investor who buys and sells securities — stocks, bonds, funds — through a brokerage account for their personal financial goals such as retirement, wealth building, or income. Retail investors are distinguished from institutional investors (funds, banks, insurance companies) by their smaller trade sizes, fewer resources for research, and greater regulatory protections. The rise of commission-free trading platforms (Robinhood, Fidelity, Charles Schwab) in the 2010s–2020s significantly increased retail investor participation. Retail investors collectively have substantial market influence: their buying drove the 2021 meme stock phenomenon and short squeezes in stocks like GameStop.
Example
During the GameStop short squeeze of January 2021, retail investors coordinating on Reddit's r/WallStreetBets collectively purchased millions of shares and call options, driving GameStop stock from $20 to nearly $500 in days. The episode highlighted the collective market power of retail investors when organized, causing billions in losses for institutional short sellers.
Source: SEC — Staff Report on Equity and Options Market Structure Conditions in Early 2021