Retail investors have a new 'toy' for speculation, Barclays says

In this photo illustration, Apps for online prediction market sites are shown on an electronic device on Feb. 25, 2026 in Chicago, Illinois. Scott Olson | Predictions markets are becoming "retail's shiny new toy," Barclays analysts said, noting their surging popularity versus other speculative investments. Monthly notional volume for predictions platforms have skyrocketed since the 2024 presidential election, with an explosion of growth last fall, the analysts said in a report Tuesday. They said prediction markets are close competitors to leveraged exchange-traded products, which are high-risk investments that use debt and derivatives to multiply returns based on the daily performance of specific assets. As of this year, monthly notional volume for prediction markets is not far behind leveraged exchange-traded products, and are comparable to index and single-stock call overwrite strategies, which commonly use call-selling to produce returns. Retail participation in derivatives markets has increased in recent years, the analysts said. Those investors make up the majority of participants in zero-day to expiration options, or 0DTE options, in the S&P 500, which is responsible for over half of total S&P options volume. Speculative urges often drive retail participants into once uncharted territory. Five years ago, retail investors fueled the meme stock surge in GameStop and other speculative names and pushed crypto mainstream . …