Schwab Trading Activity Climbs to Multi-Year High as Retail Investors Buy the Dip

The Schwab Trading Activity Index rose to a multi-year high of 59.12 in June, up 7.33% from 55.08 in May, as retail investors on the Schwab platform used mid-month market pullbacks as buying opportunities. Net buys outpaced net sells by more than two to one, with the heaviest buying concentrated during the market retreats in the weeks ended June 12 and June 19.

Information Technology led net buying at the sector level, followed by Communication Services and Consumer Discretionary. The top five purchased names were all components of those three sectors. All other eight sectors were net sold, with Financials, Health Care, and Consumer Staples seeing the lightest demand. STAX scores rose across every generational cohort, with Generation X hitting a two-year bullish high and Generation Z showing the most risk aversion.

“After retreating slightly in the first week of June, the STAX rose every subsequent week of the month, and net buys outpaced net sells by more than two-to-one,” Joe Mazzola, head trading and derivatives strategist, Charles Schwab.

Options trading reflected a generally constructive market outlook. Investors continued purchasing broad-based index and exchange-traded fund options while also selling elevated implied volatility on select single-stock options. Put selling outpaced call selling in several names, suggesting a neutral-to-bullish strategy focused on generating income.

Among individual stocks, the most actively purchased names included Space Exploration Technologies Corp. (SPCX), NVIDIA, Micron Technology, Microsoft and Amazon.com. Berkshire Hathaway, UnitedHealth Group, Snowflake, IREN and Cisco Systems were among the most heavily sold positions.

Pictured: Schwab Trading Activity Index vs. S&P 500