Retail trading is the part of this knowledge base where the gap between what is sold and what the evidence shows is widest. The product has never been cheaper to use. US online stock commissions went to zero when *Schwab, TD Ameritrade and ETrade cut them in October 2019, following Robinhood (founded 2013), whose zero-commission app launched in March 2015 (Robinhood profile); options can be traded from a phone in minutes; and the pattern day trader rule's $25,000 minimum was eliminated by FINRA amendments the SEC approved on 14 Apr 2026, effective 4 Jun 2026 (Shared facts). The business is large: Robinhood reported ~$4.47bn of revenue and ~$1.88bn of net income for 2025 and more than 27m funded customers in Q1 2026 (company release, 10 Feb 2026: ~$4.5bn revenue, ~$1.9bn net income, 27.0m funded customers at end-2025; the Q1 2026 figure is from a secondary summary). Retail orders became a large share of US options volume in 2020–21, and the 0DTE boom took S&P 500 index options to a record 66.2% same-day share of SPX volume in July 2026 (Shared facts). The outcomes evidence points the other way. The most careful studies, from US brokerage records (Barber and Odean, 2000), from Taiwan's complete day-trading records, from Brazil's futures market (Chague, De-Losso and Giovannetti, 2019: 97% of those who persisted for more than 300 days lost money — working-paper abstract), from SEBI's studies of Indian equity derivatives (93% of 1.13 crore individual F&O traders lost money over FY22–FY24, SEBI PR 37/2024 of 23 Sep 2024; ~91% in FY25 and 87.7% in FY26 — Settled by C16; the FY22-only ~89% figure is from SEBI's earlier study, verify), and from the loss percentages that European CFD brokers must publish under ESMA's 2018 rules, all find that most active retail traders lose money after costs, and that a very small minority win persistently. Regulators have acted on the design of the products as well as their disclosure: the SEC's $65m settlement with Robinhood over payment for order flow (17 Dec 2020), FINRA's $57m fine plus ~$12.6m restitution (30 Jun 2021), and Massachusetts's gamification case, settled by consent order for $7.5m** on 18 Jan 2024. This section explains how US retail brokerage became free at the point of use and who pays instead, how apps design for engagement, options approval and the 2020–21 boom, GameStop, the PDT repeal, prop-firm "challenges" and copy trading, and what the outcomes evidence says. The companion worked example computes what a habit of buying weekly out-of-the-money calls costs a year when options are priced with a skew and a variance risk premium.
What the study covers
- 1Overview: free to trade, costly to lose
- 2Units and definitions
- 3From fixed commissions to free apps
- 4Gamification and design
- 5The 2020–21 retail boom and GameStop
- 6Retail options, 0DTE and the PDT repeal
- 7Prop-firm challenges, copy trading and signal services
- 8What the outcomes evidence says
- 9Europe, India and Asia
- 10How to read retail-trading claims
- 11Key numbers
- 12Landmark firms and cases
- 13Pitfalls
- 14How an expert thinks about it
- 15Glossary
Technical exhibits
Worked examples, checklists and case studies included with this study.
Weekly Otm Calls Expected Value Worked Example
A stylized volatile stock with a 5-vol-point variance risk premium and an upward call skew: price, expected payoff, probability of profit and expected loss for weekly calls at four strikes; a year of buying one 5% out-of-the-money call every week (distribution of annual results); and how the loss splits between volatility premium, spread and fees (Monte Carlo in Python, stylized)