The U.S. retail investor returned to the markets with a vengeance in November.
Data compiled by Sandler O'Neill indicated that both E*Trade and Charles Schwab saw double-digit increases in daily average revenue trades (DARTs), a standard industry measurement of the level of daily trading. During the month, Schwab's DARTs soared by 36 percent month-over-month, while Interactive Brokers (IAB) saw a 22 percent jump. The IAB data is through November 25, while Schwab's is for the entire month.
Data released from the Investment Company Institute also indicate strong inflows into domestic stock mutual funds this month.
This type of retail trading—where individuals trade in and out of individual stocks or funds or exchange-traded funds (ETFs) through a brokerage account—is a very small part of overall trading volumes (roughly 7 percent). However, overall stock trading volumes were also much higher in November, indicating that professional investors (hedge funds, pension funds, market makers) were also much more active, according to Sandler O'Neill data.
Month over month, November cash equity volumes soared by 24 percent, and are up 16 percent year-over-year.
The derivatives markets—more typically a professional's market—also had a great month. In addition, the Chicago Mercantile Exchange (CME) saw record volume in November.