Retail traders post biggest single-stock sell-off since Covid-era rout

Traders Union
All News
Stocks
Retail traders biggest sell-off

Highlights

Retail investors recorded a net $338 million outflow from individual stocks on Thursday, the largest single-day sell-off since March 2020, according to Vanda Research.
The Dow Jones Industrial Average dropped 1,800 points and the Nasdaq Composite entered correction territory as retail buyers' dip-buying support vanished amid forced selling.
Retail demand concentrated in leveraged ETFs like TQQQ and SOXL, reflecting a shift to selective high-risk exposure instead of traditional single-stock purchases during increased volatility.

Retail selling accelerates in tech-led downturn

As reported by CNBC, citing Vanda Research, retail investors sell a net $338 million of individual stocks on Thursday, with less than an hour left in the trading session, marking the largest one-day outflow since March 2020. The research firm says the scale of the retreat stands out for a segment of the market better known for buying dips rather than pulling cash from single-name positions.

The selling unfolds during a sharp equity drawdown driven by a rotation out of technology shares. On Thursday, the Dow Jones Industrial Average falls 1,800 points, wiping out any post-midterm boost, while the Nasdaq Composite drops into correction territory.

In a note, the firm says that in a typical sell-off, retail investors buy the dip, but that support has effectively disappeared from individual names. It describes the session as a rare buyers' strike colliding with forced selling.

Leveraged products retain limited buying interest

Vanda Research says the remaining retail demand is concentrated in leveraged exchange-traded products rather than ordinary shares. It points to the ProShares UltraPro QQQ, ticker TQQQ, which delivers three times the performance of the Nasdaq-100, and the Direxion Daily Semiconductor Bull 3X Shares, ticker SOXL, which tracks moves in semiconductor stocks.

The shift suggests some traders are still seeking upside exposure, but through high-risk vehicles tied to broad technology and chip-sector swings rather than through direct purchases of individual companies. That change in behavior adds to signs that risk appetite in the retail segment is becoming more selective as volatility intensifies.

Our earlier article on the Nasdaq-100 (NDX) highlighted the index trading under short- and medium-term selling pressure after a sharp intraday selloff, with downside risk elevated while price remained below key moving averages and near defined resistance/support levels. It also noted the launch of Janus Henderson and Centrifuge’s JQQQ, a blockchain-native fund designed to broaden digital access to Nasdaq-100 exposure even as near-term momentum signals stayed mixed.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.