Retail investor
Also known as: individual investor
A retail investor is an individual trading their own money through a regular , as opposed to a professional managing money on behalf of others. The term draws a line between everyday individual investors and such as , , and , which trade much larger sums and often have access to research, tools, and investment opportunities individual investors do not.
Retail investors generally face different rules than institutions. They typically pay retail commission and fee structures, may face restrictions on certain complex products, and do not get the same direct access to company management or early access to new securities offerings that large institutions often do. At the same time, the rise of commission free trading apps and easy access to information has narrowed some of the gaps that used to separate retail investors from professionals.
Retail investors as a group have become a more visible force in markets over the past decade, capable of driving sharp moves in individual when large numbers of them buy or sell in a short period, as seen in several heavily discussed in 2021. Even so, retail investors collectively still own a smaller share of the US than institutions, which continue to control the majority of and .