biostudies-literatureUnknown144Baig ASExisting research suggests that retail trading is associated with volatility in financial markets. To extend the literature, we study the dynamic effects of retail trading on volatility during the COVID-19 pandemic. Using marketable retail trades identified from the Boehmer et al. (2021) algorithm and novel empirical methods discussed in Jordá (2005), we document a negative, persistent impact of retail trading on the stability of stock prices that is particularly stronger during the pandemic than during the pre-pandemic period. These results highlight how periods of crises - like the pandemic - affect the destabilizing influence of retail trading. To provide additional evidence, we replicate our empirical exercise during the 2008-09 financial crisis. Consistent with the COVID-19 period, weJournal of banking & finance106627https://www.ebi.ac.uk/biostudies/studies/S-EPMC9355410biostudies-literatureDo retail traders destabilize financial markets? An investigation surrounding the COVID-19 pandemic.PMC9355410Yasin AButt HABaig ASBlau BMfalseDo retail traders destabilize financial markets? An investigation surrounding the COVID-19 pandemic.Existing research suggests that retail trading is associated with volatility in financial markets. To extend the literature, we study the dynamic effects of retail trading on volatility during the COVID-19 pandemic. Using marketable retail trades identified from the Boehmer et al. (2021) algorithm and novel empirical methods discussed in Jordá (2005), we document a negative, persistent impact of retail trading on the stability of stock prices that is particularly stronger during the pandemic than during the pre-pandemic period. These results highlight how periods of crises - like the pandemic - affect the destabilizing influence of retail trading. To provide additional evidence, we replicate our empirical exercise during the 2008-09 financial crisis. Consistent with the COVID-19 period, we2022-01-01T00:00:00Z2022 Nov2025-04-26T05:21:34.67Z2025-02-19T03:00:22.158ZS-EPMC93554103595942310.1016/j.jbankfin.2022.106627