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Stories of Interest
- New Cyberattack Goes Global, Hits WPP, Rosneft, Maersk
- Deutsche Bank Said to Lose as Much as $60Mn Over Derivative Trade
- Dimon Says JPMorgan Headcount to Keep Rising Despite Automation
- RBS to Cut 443 Jobs In UK, Move Many of Them to India
- Deutsche Bank Bullish on London Despite Brexit
- Supreme Court Nears Finish With Big Cases, Retirement Rumors
- The Richest Person in Every State
- LPL Tabs Scott Seese, Former eBay Exec, as Chief Information Officer
- Fired Biglaw Associate Arrested for Trying to Extort Partners
- Canada's CIBC Completes $5Bn PrivateBancorp Buy
- Word ‘Women’ Literally Never Appears in U.S. Senate’s 142-Page Health-Care Bill
- Stephen Pierce, Goldman Sachs Global Head of Equity Markets, To Retire
- Al Gore 'Not Very Smart,’ But Became Filthy Rich Using Simple Investing Formula - Charlie Munger
- U.S. Regulators, Lawmakers Support Volcker Rule Revamp at Hearing
- Morgan Stanley Opts for Frankfurt as New EU Hub
- A New Risk for Goldman, Morgan Stanley in Stress Tests (subsc reqd)
- A Trump Bump for Law Firm of President’s Lawyer - Kasowitz Benson Torres
- JPMorgan, BofA, Goldman, Citi, Wells Fargo Pass Fed's Stress Test
- Blackstone Stock Still Trading at $31 - Its IPO Price From 10 Years Ago
- NJ Resident and NY-Based Global FX Club Charged with Solicitation Fraud, Misappropriation - CFTC
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NEWSLETTERS & ALERTS
Wall Street News
Where’s the Beef? Market Volume and Volatility
[Photo: Wendy's 'Where's The Beef' Commercial from 1984 / YouTube]
Stock market indices are crazy up since their last dip on November 4 ,2016 - the Dow is up 15.7%, S&P 500 is up 13.2%, and Nasdaq is up 16.9%. And, bank stocks are leading the way. So you’re thinking, if only banks could make markets and trade for their own accounts they’d be minting money.
Except nothing can be further from the truth. Traders are languishing in this market. Stock trading is slow. Volume and volatility are low. And realized volatility – the actual volatility of the S&P 500 over successive 30-day periods – is near historic lows.
While many market experts haven’t a clue, some possible explanations for recent trends include, the following:
- Trading technology – automated traders, and various types of algo traders – have made the markets extremely efficient.
- ETFs are reducing volatility because investors can trade the ETFs without trading the basket of underlying stocks.
- The Fed has tamped down volatility for years by keeping rates low and essentially encouraging people to buy equities due to its quantitative easing program.
That said, traders can try and wait for the trends to reverse, or they can figure out ways to reduce costs or gain economies of scale.