Retail investors are standing at one of the biggest turning points in modern market history. A game once dominated by institutions is now being reshaped by everyday traders armed with nothing more than their phones.
Today, retail investors make up roughly 16% of all single-stock trading volume - double what it was just a year ago. That means out of every 100 shares traded, 16 now come from individuals, not hedge funds or big desks. Daily retail trading has surged past 1.2 billion shares, up from around 600 million earlier this year - an extraordinary jump in just months.
But the real engine driving this frenzy isn’t just stocks - it’s options, and more specifically, zero-days-to-expiry (0DTE) contracts. These are trades that expire the same day they’re made. By September 2025, these ultra-short-term bets accounted for around 60% of all S&P 500 options volume, and retail traders are the ones fueling the movement.
A single $2 option contract can control $100 worth of stock, which means even a small move in price can result in massive gains or equally massive losses. This extreme leverage can move prices faster than ever. When traders rush into calls, market makers must buy stock to hedge their exposure, driving prices higher. That self-reinforcing cycle is known as a gamma squeeze - the same force that can send entire sectors soaring in minutes.
But that power cuts both ways. The same leverage that can ignite a rally can also destroy it. When trades turn against retail investors and they start closing out positions, market makers unwind their hedges - selling into weakness and accelerating the drop even further.
What many traders don’t realize is just how quickly 0DTE contracts decay. They lose value minute by minute, and even a short hesitation can flip a winning idea into a costly mistake.
anandcapital.substack.com/$NVDA (NVIDIA Corporation)$TSLA (Tesla Motors, Inc.)$AVGO (Broadcom Inc)$BTC... Show More
Great analysis, excessive use of leverage is very risky for retail investors.... Show More
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Thu Dec 11 2025 02:45:58 GMT+0000 (Coordinated Universal Time)
