The New York Stock Exchange looks like a big loser in the Citigroup reverse split.  Up through last Friday, shares of Citigroup had been a magnet for high trading activity because of its great liquidity, the exchange rebates to traders, and low price.  Citigroup was consistently the most actively-traded stock on the the Big Board, often accounting for about 10% of volumes for all NYSE-listed stocks. 

On a typical day, over 450 million-500 million Citigroup shares were traded - with numbers reaching upwards of 600 million-800 million shares.  That compares to the average 4.7 billion shares that are traded daily on the NYSE consolidated tape.

The reverse stock split, however, will dampen trading volumes in Citigroup stock because the number of shares outstanding will drop 10-fold.  Citi’s higher stock price also will make it less attractive to traders who had been trading the stock primarily for the rebate.

The exact impact on trading activity remains to be seen, but it wouldn’t be surprising if total NYSE consolidate tape volumes are reduced by upwards of 300-400 million shares per day to potentially somewhere around 4.2 billion-4.3 billion shares as a result of Citi’s reverse stock split.  This drop in trading comes amidst a general decline in trading volumes on the NYSE.  In March 2008, the NYSE Consolidated Tapes reported average daily trading volume of 5.02 billion shares.  Three years later, in March 2011, average daily volumes are 4.68 billion shares.   [CNBC.com, 5/9/11]

    Note:  Read about the impact of Citi's reverse split on share prices - in a 5/9/11 WHO's News  story.