Schwab Trading Activity Index Rises Modestly in July as Clients Buy Dips

Charles Schwab's monthly trading activity gauge ticked higher in July, reaching 59.80 versus 59.12 in June, as retail clients continued to buy stocks on weakness and trimmed positions in winners.

The Schwab Trading Activity Index (STAX) is a proprietary behavioral measure based on positions and trading activity across millions of client accounts. The latest reading shows clients were net buyers overall, adding exposure in individual equities, ETFs and options during late-month pullbacks.

"While major indices posted strong gains in July, those gains masked uneven performance across individual stocks," said Joe Mazzola, head trading and derivatives strategist at Charles Schwab. He described clients as selective, buying stocks that had pulled back and taking profits in names that had already advanced.

Economic reports during the period were generally supportive, particularly in employment and manufacturing, while inflation concerns lingered. The Federal Reserve left its policy rate unchanged in a 3.5%-3.75% range at its late July meeting, with three officials dissenting in favor of a hike.

Trading patterns

In equity and ETF markets, Schwab clients were net buyers at a two-to-one ratio. Options activity skewed toward put selling, especially in technology names and semiconductor/memory-related sectors. Buying interest was strongest among Gen X investors and self-directed traders.

Among the most bought names were Space Exploration Technologies, Micron Technology, Intel, Oracle and Tesla. On the sell side, clients were net sellers of Apple, Advanced Micro Devices, Broadcom, PayPal and Adobe.

The index does not predict future returns but serves as a snapshot of how retail investors positioned themselves in the market during the month. Schwab publishes the STAX reading monthly as part of its retail investor behavior commentary.