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The Meme-Stock Craze Pushed Off-Exchange Trading to a Record High

The Meme-Stock Craze Pushed Off-Exchange Trading to a Record High
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Last week’s revival of investor enthusiasm for GameStop and other meme stocks triggered a flurry of trading outside of public stock exchanges.

A record 51.9% of shares traded on Thursday changed hands on off-exchange trading venues, where many of the buy and sell orders submitted by individual investors are executed, according to data from Rosenblatt Securities.

The last such record was set on Feb. 9, 2021, during the original meme-stock craze, according to Rosenblatt.

Usually around 40% to 45% of U.S. equities trading volume is executed on off-exchange venues, but that percentage tends to rise when there are bursts of activity by retail investors. Retail brokerages route many of their customers’ orders to electronic trading firms such as Citadel Securities and Virtu Financial.

Some of the most heavily traded stocks on Thursday were small, Nasdaq-listed tech companies that trade for less than $1 per share and have a following on social media among some meme-stock investors, including Crown Electrokinetics and Greenwave Technology Solutions. Because such stocks trade for just pennies a share, they can account for an outsize part of daily market volume when measured in terms of the number of shares traded.