By Suzanne McGee
(Reuters) -Fidelity Investments is rolling out a major upgrade to its trading platform on Thursday to meet the rapidly growing demand for new tools by self-directed individual investors.
The new Fidelity Trader+ platform will offer real-time analytics, customizable charts and other features to the firm's most active traders, a fast-evolving and growing group of individuals whose activity increasingly shapes the market.
"These are some of our better customers in terms of engagement and
activity, and they have a unique set of needs," said Josh Krugman, senior vice president of brokerage at Fidelity. This group is more likely to trade individual stocks and exchange-traded funds and to use analytical tools that they can customize to track their individual portfolios in real time.
Fidelity's latest push is part of a broader effort by brokerage firms to capture a greater piece of the retail investor base, which has played a vital role in propping up markets since the COVID-19 pandemic. Earlier this month, Robinhood Markets unveiled Robinhood Social, a social media-based community embedded in the firm's trading app that allows the company's customers to share strategies and information with their peers, with the goal of providing those active traders with what CEO Vlad Tenev described in a press release as a "financial super-app". Another firm catering to retail investors called Moomoo Financial is pushing for, and winning, access to a greater share of hot IPOs like Gemini Space Station and Bullish, its executives told Reuters. A large portion of Robinhood's own IPO in 2021 was directed to its retail clients.
Other retail brokerages have been behind a big push into overnight and 24-hour trading.
Calculating how much of overall daily trading volume comes from retail investors is notoriously difficult, but Marco Iachini, senior vice president of research at Vanda Group, said his firm's research suggests this group now accounts for some 8% of the dollar value of all stock trading, and double that for the most-loved retail stocks like Nvidia and Tesla. That, he told Reuters earlier, is about quadruple pre-pandemic levels.
INDIVIDUAL INVESTORS DRIVE MARKET ACTIVITY
In a report published earlier this month based on data from its own platform, Citadel Securities puts that figure at nearly 20%, and higher still for recent IPOs surrounded by market buzz. That group has played a key role in supporting markets during selloffs, most notably during the mayhem that followed President Donald Trump's April "Liberation Day" tariffs bombshell.
"Retail investors bought the dip, shifted to higher-beta stocks like Tesla, and were rewarded handsomely," said Iachini. "This only reinforces their ‘buy the dip’ mentality."
It also increases the demand for tools to support that kind of trading activity by individual investors, who were previously more likely to buy and hold low-cost index funds and leave active trading to hedge fund managers, algorithmic trading programs and other professionals.
"Expectations by these clients have become very high," said Fidelity's Krugman, noting that the firm is now offering them access to fractional ownership of CDs, or certificates of deposit. Another new Fidelity initiative: allowing its active trader community to invest in a product akin to a separately managed account -- a more customized portfolio -- for only $5,000. Until very recently, a minimum SMA investment would have been at least $100,000, Krugman said.
(Reporting by Suzanne McGee in New York; Editing by Lisa Shumaker)
