New data shows that the individual-trading boom—a byproduct of increased time at home due to the pandemic along with free trading apps and a resurgent bull market—has “reshaped the U.S. stock market,” according to a recent article in The Wall Street Journal.

The article outlines the following points:

• Trading by individuals represents a bigger portion of market activity than at any time during the past 10 years (data from Bloomberg Intelligence), accounting for 19.5% of total U.S. shares traded in the first six months of this year, up from 14.9% last year and nearly double the 2010 level.
• Small investors are driving share movement, a trend called the Robinhood effect (named after the popular app). According to Ritholtz Wealth Management chief operating officer Nick Maggiulli, while the activity doesn’t affect most stocks, there is evidence of an effect on smaller stocks—specifically, when Robinhood users buy them, their price tends to drop.
• The individual investing boom has led to high levels of “dark” trading—that is, stocks being bought and sold in private venues rather than on public exchanges. According to the article, “Exchanges such as the New York Stock Exchange and Nasdaq Inc. have long complained that too much dark trading harms market transparency.”
• Electronic traders are the big winners. “The firms that execute individual investors’ orders have enjoyed surging volumes,” the article reports, citing Citadel Securities, Virtu Financial and Susquehanna International Group LLP as the biggest players.