It seems plausible that it's mostly the former. Kind of like gambling: if you know you're going to lose $20 just for playing, you have to be significantly more

It seems plausible that it's mostly the former. Kind of like gambling: if you know you're going to lose $20 just for playing, you have to be significantly more confident in your ability to win than if you don't have to lose anything just for playing. The article cites some random blue-collar worker who makes a good point: trade costs mean you're paying basically 7% in fees on smaller stuff, which is what most "Mom and Pop" investors can afford. Nobody wants to do that.