Research: US retail investors drive surge in leveraged ETF trading volume

Gelonghui, February 24 — According to a new study co-authored by Direxion, a provider of single-stock leveraged market trading ETFs, and two research firms, Vanda Research and The Compound Insights, nearly 90% of single-stock leveraged ETF trading in the U.S. market can be traced back to individual investors’ activities. Data shows that the rapid expansion of these ETFs, which allow investors to bet on the short-term movement of underlying stocks, is almost entirely driven by retail investor interest. The study also found that last year, trading volume of single-stock leveraged ETFs accounted for 8% of the total trading volume across all U.S. exchanges. Morningstar ETF analyst Bryan Armour stated, “The proliferation of products indicates that the market’s reliance on speculation is deepening.” According to Morningstar Direct, there are currently 355 single-stock leveraged ETFs in the U.S. market, of which only 80 were launched before January 2025. The study further revealed that since their debut in the U.S. at the end of 2022, leveraged ETF trading volume has grown at an annual rate of 29%, outpacing the growth of stock and options trading volumes.