by 2 minutes ReadFILE PHOTO: A GameStop store is pictured in New York City’s Jackson Heights neighborhood on January 27, 2021. Nick Zieminski/Reuters (Reuters) – LONDON (Reuters) – According to Morgan Stanley, retail investors now contribute for around 10% of daily trading volume on the Russell 3000, the main U.S. stock index, after peaking at 15% in September as workplace boredom and excess savings sparked interest in stock markets. The retail craze that began last summer has continued into 2021, with so-called “meme stocks” such as GameStop and AMC Entertainment skyrocketing by more than 1,000 percent, perplexing expert traders. According to Refinitiv data, the average daily trading volume on the Russell 3000 index over the last five days was $380 billion, implying that individual traders contributed about $38 billion every day. Retail investors in Europe, on the other hand, account for 5% of overall market volume, according to Euronext. Morgan Stanley claims that the phenomena has sparked several inquiries from its clients on how to accurately forecast retail activity. “We find that retail investors choose firms in categories that they are likely to be familiar with as consumers, such as consumer discretionary, communication services, and technology,” according to a note from the American investment bank. Morgan Stanley discovered that over the five-year period from July 2016 to June 2021, stocks with strong retail participation continued to beat stocks with low retail participation over the next one month, using its own techniques. According to the bank’s analysis, these traders have a split quality preference, with the most activity in high quality and garbage names. The latest name to witness massive speculative wagers by small individual traders was Meta Material, formerly Torchlight Energy. Other companies that made news during the retail trading craze included Clover Health Investments and Koss Corp. Thyagaraju Adinarayan contributed reporting, and Kirsten Donovan edited the piece. Continue reading