US retail investors drive surge in leveraged ETF trading

24 Feb 2026 12:21

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Economics
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US retail investors drive surge in leveraged ETF trading

Photo: Reuters

Nearly 90% of leveraged single-stock ETF trading in the U.S. is now attributed to individual investors, according to a new study by Direxion, Vanda Research, and The Compound Insights. These ETFs, which allow speculation on short-term stock movements, have seen a 318% increase in listings since January 2025, with retail traders accounting for up to 40% of market activity during volatile periods.

Despite rising demand, the U.S. Securities and Exchange Commission continues to resist asset managers’ push to expand leveraged single-stock products that could offer 3–5x exposure in a single day, News.Az reports, citing Reuters.

Analysts note the trend underscores the growing reliance on speculation in U.S. markets, especially among retail investors seeking high-risk, high-reward opportunities.

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The study highlights a rapidly expanding segment of the market, outpacing the growth of stock and options trading, and signals that future market selloffs could see similarly outsized retail-driven activity in leveraged ETFs.

News.Az

By Aysel Mammadzada