Research on the GameStop Stock Prices Surge during Covid-19 under the Perspective of Individual Investors

The breakout of the covid-19 in the United States has caused significant changes in the stock market, while the proportion of individual investors’ direct trading increases. The recent Game Stop(GME) short-selling incident showed the power of retail investors, which makes people pay attention to the trend of the return of retail investors to the US equality market. This paper researches the factors that increase individual investors’ direct trading behavior in the US stock market during covid-19 and forecasts the stock market's future dominance trend. The research method is to analyze data from Yahoo Finance, and reference the applicable hypotheses and economics policies. Four factors increase the individual investors’ direct trading: quarantines and fiscal incentives after the outbreak, retail brokerages zero commission model, stock volatility gives to more opportunities for market speculation, and the influence on social media. Individual investors have made a complex impact on the stock market, however, individual investors' active direct trading behavior is less likely to last for a long time, the dominance of institutional investors is still a long-run trend.