economy
March 4, 2026
Small investors are controlling the market again this year. They are about to get more money to play with
February was the fifth-best month for net retail trader buying in the last five years, and tax refunds could further embolden these investors.
TL;DR
- Retail investors have been a significant force in the market in 2025 and continue to be in 2026.
- February was the fifth-strongest month for net retail buying on Citadel Securities' platforms in the last five years.
- Retail traders are characterized by their tendency to "buy the dips," and this strategy has intensified in 2026.
- Year-to-date, average net notional traded on Citadel's platform has been 2.5x larger on S&P down days than on up days.
- In February, net notional on S&P down days was 4.3x that of up days.
- Higher-than-normal tax refunds are expected in 2026 due to President Donald Trump's "big beautiful bill."
- The impact of tax refunds on the market is expected to increase over the next two months, as more refunds are distributed.
- Elevated money market balances combined with refund seasonality suggest incremental retail liquidity remains available into March.
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