TD Ameritrade's IMX Index Measures Retail Investor Sentiment

Steve Quirk, TD Ameritrade's Senior VP, appeared on CNBC's Halftime Report earlier to detail the company's new indicator. The indicator, called the IMX Index, measures the sentiment of the company's retail clients. TD Ameritrade is one of America's biggest brokerages for retail investors. The IMX Index measures what TD Ameritrade's clients are actually doing in the market. Rather than just watching fund flows into mutual accounts, the IMX Index can paint a more accurate picture. Specifically, the Index takes into account derivative positions as well as equity purchases. Qurik noted that in January investors turned a bit more bearish than in the fall; while on a net basis investors were still purchasing stocks in January, they shifted their purchase away from high beta names like lululemon

in favor of less market sensitive stocks like Exxon Mobil

. In addition, investors were increasingly pairing their long equity positions with downside protection, buying puts and taking similar measures. Overall, Quirk challenged the traditional notion that retail money was the “dumb” money, calling the notion “antiquated.” On the whole, Quirk stated that TD Ameritrade was seeing increased activity across the board, though things certainly weren't back to the way they were before 2008. He described a three step process where retail investors gradually move “from sitting into the stands, to the sidelines to getting into the game.” Investors can get this indicator on

calendar.