Schwab clients were net buyers, using late-month dips to add exposure across individual stocks, ETFs, and options

Key Takeaways:

The Schwab Trading Activity Index™ (STAX) increased to 59.80 in July, up slightly from its score of 59.12 in June.
Clients remained net buyers in July, using late-month dips to add exposure across individual stocks, ETFs, and options.
The strongest buying interest came from two clear groups: Gen X clients, who continued to lead net buying by age cohort, and self-directed traders, whose bullish activity accelerated during the month.

The Schwab Trading Activity Index™ (STAX) increased to 59.80 in July, up slightly from its score of 59.12 in June. The only index of its kind, the STAX is a proprietary, behavior-based index that analyzes retail investor stock positions and trading activity from Schwab’s millions of client accounts to illuminate what investors were actually doing and how they were positioned in the markets each month.

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"While major indices posted strong gains in July, those gains masked the fact that many individual stocks performed unevenly—while some stocks rose sharply, others struggled," said Joe Mazzola, Head Trading and Derivatives Strategist at Charles Schwab. "In response, Schwab clients were selective about where they put their money, buying stocks that had pulled back and taking profits in names that had already run up or no longer offered the most compelling opportunities."

Economic data during the July STAX period was generally strong, particularly in employment and manufacturing. Inflation remained a concern, though Federal Reserve policymakers kept rates paused at a range of 3.5% to 3.75% at their late July meeting, with three dissenting in favor of a hike. Treasury yields climbed sharply during the month as crude oil prices surged, reflecting back-and-forth U.S. and Iranian attacks in the Persian Gulf and the continued trade disruptions affecting the Strait of Hormuz. Against that backdrop, trading activity was less focused on broad exposure and aimed instead at clean, tactical opportunities across individual names.

Clients remained net buyers in July, using late-month dips to add exposure across individual stocks, ETFs, and options. In ETF and equity trading, Schwab clients tracked by STAX were net buyers by a two-to-one ratio, suggesting bullish sentiment remained firm, particularly among self-directed traders. Options in particular saw strong activity in July, with trading again skewing toward put selling, particularly in technology stocks and the chip and memory industries. The popularity of both ETFs and options during the period may indicate that clients were seeking market exposure while also managing risk.

Volatility beneath the surface likely contributed to the higher STAX score. As many technology stocks pulled back, traders appeared more willing to buy dips in names with sharper moves while showing less interest in stocks that remained rangebound. From a demographic perspective, the strongest buying interest came from two clear groups: Gen X clients, who continued to lead net buying by age cohort, and self-directed traders, whose bullish activity accelerated during the month.

Popular names bought by Schwab clients during the period included:

Space Exploration Technologies Corp. (SPCX)
Micron Technology Inc. (MU)
Intel Corp. (INTC)
Oracle Corp. (ORCL)
Tesla Inc. (TSLA)

Names net sold by Schwab clients during the period included:

Apple Inc. (AAPL)
Advanced Micro Devices Inc. (AMD)
Broadcom Inc. (AVGO)
PayPal Holdings Inc. (PYPL)
Adobe Inc. (ADBE)

About the STAX

The STAX value is calculated based on a complex proprietary formula. Each month, Schwab pulls a sample from its client base of millions of funded accounts, which includes accounts that completed a trade in the past month. The holdings and positions of this statistically significant sample are evaluated to calculate individual scores, and the median of those scores represents the monthly STAX.

For more information on the Schwab Trading Activity Index, please visit www.schwab.com/investment-research/stax. Additionally, Schwab clients can chart the STAX using the symbol $STAX in either the thinkorswim^® or thinkorswim Mobile platforms.

Investing involves risk, including loss of principal. Past performance is no guarantee of future results.

Content intended for educational/informational purposes only. Not investment advice, or a recommendation of any security, strategy, or account type.

Options carry a high level of risk and are not suitable for all investors. Certain requirements must be met to trade options through Schwab. Please read the Options Disclosure Document titled "Characteristics and Risks of Standardized Options" before considering any option transaction.

Historical data should not be used alone when making investment decisions. Please consult other sources of information and consider your individual financial position and goals before making an independent investment decision.

The STAX is not a tradable index. The STAX should not be used as an indicator or predictor of future client trading volume or financial performance for Schwab.

About Charles Schwab

At Charles Schwab, we believe in the power of investing to help individuals create a better tomorrow. We have a history of challenging the status quo in our industry, innovating in ways that benefit investors and the advisors and employers who serve them, and championing our clients’ goals with passion and integrity.

More information is available at aboutschwab.com. Follow us on X, Facebook, YouTube, and LinkedIn.

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MEDIA:

Margaret Farrell

Charles Schwab

Phone: 203-434-2240