Chris Hussey: And what are they doing now? Are there any trends? John Marshall: So the first and most important one is in the ETF market. This represents the buy-and-hold investor. Investors who are intending to buy a very broad basket of stocks and hold onto it for a long period of time. They have been buying a lot this year. 350 billion in inflows into these ETFs, individual investor ETFs. And this is even better than in 2021 when we had 300 billion of inflows. The other area where they're doing significant buying is in single stocks. So single-stock shares of individual stocks. This is more like a medium-term investor, and they're picking themes. A lot of, of course, AI in this flavor of investor. And we've seen five times the amount of NASDAQ 100 buying this year as compared to 2021. So that particular theme is really coming out in the data as accelerating.
Chris Hussey: Is the retail trend your friend? Should you be following this or fading them? John Marshall: It's a great question. A lot of people like to think of it as a contrarian indicator. Okay, retail is really hot on a particular stock or sector, so that's a sell signal. We find that is not true. You generally want to be following this cohort of investor and monitoring their enthusiasm level.
Chris Hussey: Another observation that you've made in the past has been that retail investors are very active in options and even single-stock options. So, you know, walk us through a little bit about this. John Marshall: Yeah, the options activity is particularly interesting because this is the short-term investor. The average single-stock option has only two weeks to expiration, so all of this activity really relates to expectations within the next two weeks. There's been a lot of call buying. And in particular in 2025 we've seen about 420 billion notional of options trade per day. This is a little bit less than in 2021 when the meme craze was on, but it's still a really high level. And it shows you how much anticipation there is of short-term moves in the market.
I'd say what people have actively been doing to really monetize some of these retail activity over the last few years has been option-selling strategies. So the dominant retail trade is buying calls and buying puts. Buying puts to protect their portfolio, and buying calls in order to gain upside asymmetric exposure to stocks. That bids up options on both sides, and strategies that sell those options to generate income have added benefit in this type of environment. And in particular, there are a lot of bondholders out there that are looking at yields and thinking, "Ah, these yields, I really want more than the bonds can give me." And so what they're doing is moving into defensive, high-income equity products that sell these options. We've seen about 30 billion in inflows over the last year into ETFs and mutual funds that sell options to generate yield, and they're relatively defensive.