Volatility Boosts Online Brokerage Stocks Amid Policy Uncertainty

When policy uncertainty and volatility rise, retail investors tend to flock to online brokerage platforms in search of short-term opportunities. This phenomenon can lead to increased trading volumes, which in turn benefits companies like MarketWise, Webull, and Coinbase Global.

MarketWise is a content and technology platform that provides subscription-based financial research, education, software, and trading tools to self-directed investors. Its revenue is closely tied to the activity of individual investors, making it an attractive play on retail trading cycles. However, analysts have raised concerns about MarketWise's thin profit margins, negative shareholder equity, and high dividend payout.

Webull, on the other hand, is a digital investment platform that allows retail investors to trade stocks, options, crypto, and other assets through its U.S.-licensed broker dealer. Its revenue is tightly linked to trading activity, margin use, and options volume, making it an attractive play on volatility-driven order flow. Analysts expect Webull's revenue and earnings growth to continue, driven by higher activity in equities, options, and crypto.

Coinbase Global operates a large crypto trading platform that acts as a primary account for U.S. retail investors and institutions. Its revenue is heavily reliant on trading volumes, which can be affected by policy uncertainty and volatility. However, management is working to shift the company's focus towards higher-margin services like derivatives, tokenization, and subscription products.