Nearly two-thirds of American investors under 35 — 62% — say they believe they have to take big risks to reach their financial goals, according to a survey from the Financial Industry Regulatory Authority, the brokerage industry’s self-funded watchdog. Those numbers drew fresh scrutiny on Thursday as the behavior behind them came into sharper focus: 43% of that group has traded options, 29% has bought meme stocks, and 22% has invested with borrowed money. The takeaway is a generation treating the market less like a savings account and more like a lottery ticket.
The why is not hard to trace. For many under-35 investors, the old markers of building wealth — a house, a stable career ladder, a paid-off mortgage — feel out of reach, so the calculus on risk shifts. Wealth has grown more concentrated among older and richer households, housing remains unaffordable in much of the country, and steady jobs are harder to land. Most investors under 30 have also only ever traded through a bull market, which tends to make speculative, high-beta bets look like the normal way to make money rather than the exception.
That appetite is showing up in hard credit numbers. U.S. margin debt — what investors borrow from their brokers to buy securities — rose 54% from a year earlier to a record $1.4 trillion in May, according to FINRA data. And that figure leaves out the fastest-growing forms of borrowing entirely: leveraged exchange-traded funds, which aim to double or triple the daily move of an index, plus the embedded leverage baked into futures and options.
Citadel Securities put hard figures on the pileup. Assets in leveraged ETFs have reached a record of roughly $218 billion, up about $82 billion, or 60%, since the end of March alone. Leverage tied to technology has grown 136% over that stretch, while leverage linked to semiconductors has nearly tripled, climbing 175%. Retail traders are also loading up on short-dated contracts, trading a record $7 billion in options premium a day in June, up from $5.8 billion in May, with new participation records set almost weekly on the firm’s platform.
The line between investing and gambling is blurring in the process. A survey from Northwestern Mutual found 32% of Gen Z respondents gamble in crypto or sports betting, 35% of millennials own crypto, and 24% bet on sports. The same survey carried a wrinkle worth noting: despite a year of wild swings, more young people reported feeling financially secure than a year earlier — 39% of Gen Z, up from 36%, and 52% of millennials, up from 43%. Confidence and risk-taking are rising together.
Wall Street is building for the trend rather than fighting it. Brokerages, leveraged-ETF issuers and prediction-market operators are rolling out products aimed squarely at young, active traders, and the demand is feeding the supply. Social media is doing the marketing. A J.P. Morgan Personal Investing survey found many Gen Z and millennial investors now source ideas from financial influencers, Reddit forums and online tips rather than advisers or newspapers. Claire Exley, head of financial advice and guidance at the firm, cautioned that engaging with online sources can help build knowledge but urged young investors to verify information and seek guidance before acting.
The concern among market veterans is less about the whole market cracking than about individual traders blowing themselves up. Margin debt at record highs partly reflects a market at record highs — it is a concurrent signal, not automatically a warning. But borrowed money and triple-leveraged funds cut deep in a downturn, and the AI-driven rally powering these bets has already shown tremors in recent weeks. The risk for this cohort is simple: the tools that magnify gains in a rising market magnify losses just as fast when it turns, and a generation that has never traded through a real bear market is about to learn how that math works.
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