Charles Schwab's Trading Activity Index (STAX) rose to 55.08 in May, up from April's 50.10, as retail investors returned to equities, particularly technology stocks, while also increasing their use of exchange-traded funds (ETFs) and options for risk management. The data, released by Schwab on June 12, 2026, indicates renewed participation in the artificial intelligence-led market rally, albeit with a more cautious approach.
The STAX index, which measures retail investor activity based on a proprietary analysis of holdings, positions, and trading from a monthly sample of millions of accounts, climbed during the period but remained below levels seen in February and March of this year, according to Joe Mazzola, head trading and derivatives strategist at Charles Schwab.
Information technology led the buying spree, followed by consumer discretionary and industrials. Among the top net-purchased stocks were Nvidia (NVDA), Micron (MU), Intel (INTC), Microsoft (MSFT), and Amazon (AMZN). On the other side, Apple (AAPL), Advanced Micro Devices (AMD), Tesla (TSLA), CrowdStrike (CRWD), and Oracle (ORCL) were among the most net-sold names during the period.
ETF Rotation Signals Caution
While investors are piling back into individual stocks, there is a clear shift toward diversified ETFs, reflecting ongoing caution. Mazzola noted that 36% of Schwab clients now prefer ETFs over picking individual stocks, a significant change in behavior. This rotation suggests that retail participants are seeking broader market exposure while managing risk.
Options Activity Heats Up
Options trading also saw a notable uptick. Schwab clients increasingly used options to gain exposure to technology names on the upside, rather than buying shares outright, aiming to reduce risk. Put selling accelerated in May as investors sought better entry levels. However, Schwab cautioned that selling puts still carries the obligation to purchase the underlying stock if it falls below the strike price.
Broader options market data confirmed the trend. The Options Clearing Corporation (OCC) cleared 1.47 billion contracts in May, a 25.2% increase year-over-year. Options contracts accounted for 1.46 billion of that total, up 25.3%. Meanwhile, Cboe Global Markets reported a record average daily volume of 22.0 million contracts across its four options exchanges for the month, driven by record multi-listed options volume and growth in index options trading.
Market Context
The broader market backdrop supported the activity. U.S. stocks surged on Thursday, with the S&P 500 climbing 1.8%, the Dow Jones Industrial Average gaining 1.9%, and the Nasdaq Composite rising 2.5%. Schwab's update on Friday indicated that major indexes were on track for a winning week, buoyed by a bounce in technology shares and hopes for geopolitical peace.
Despite the increased participation, the STAX reading for May suggests that retail investors remain engaged in the AI rally but are also keeping some protection in place. Schwab emphasized that the index is not tradable and should not be relied upon alone for investment decisions.
