New Nasdaq Tool Eyes Retail Trading Activity

Stock exchange’s new daily tracker provides insights into traders’ ‘hive’ mind

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Images by Tang Ming Tung / Getty Images

A tracking tool introduced Thursday by Nasdaq opens a window on stocks and exchange-traded funds with the most activity among small, individual traders. 

A free version of the Retail Trading Activity Tracker, available on the cloud-based Nasdaq Data Link platform and Nasdaq.com, provides day-old information on the top 10 most active retail stocks and ETFs. A paid version provides activity data on more than 9,500 U.S.-traded stocks and historical information going back to 2016.

Individual, or retail, traders became an increasingly important group to watch when the rise of social media allowed them to gain collective power to influence markets. Earlier this year, individual investors banded together in Reddit forums to drive up GameStop stock, eventually forcing hedge funds that had taken huge bets against the company to close their positions at a loss.

The GameStop incident cast a spotlight on young retail traders’ penchant for meme stocks, which garner a cult-like following on social media and trade based on a “hive” mentality instead of company performance. Meme-stock trading by young investors has drawn the attention of regulators and, most recently, the Federal Reserve.

“The increased participation of individual investors is rapidly changing market dynamics,” said Oliver Albers, Nasdaq’s senior vice president and head of data, investment intelligence, in a statement. “We aim to level the playing field and make data, and by extension, the financial markets, more transparent and accessible to all.”

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