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Stories of Interest
- I Owned Bitcoin For a Weekend and Here's What I Learned
- SEC Appoints New Chair and Board Members to PCAOB
- FINRA, Georgetown Team Up to Deliver 'Certified Regulatory and Compliance Professional' Program
- FINRA Board Meeting - This Week's Agenda
- Statement on Cryptocurrencies and Initial Coin Offerings - SEC Chair Clayton
- Company Halts Initial Coin Offering Over SEC Registration Concerns
- Kevin O'Leary Explains One Big Thing People Don't Understand About Bitcoin (But Need To)
- CME Bitcoin Futures: A Better Way to Buy (or Short) Bitcoin?
- Address at ICI's 2017 Securities Law Developments Conference - SEC Commissioner Stein
- New York Pension Fund Seeks More Pay Disclosure from Wells Fargo
- Wells Fargo Sanctions Are on Ice Under Trump Official
- Josh Brown: Here's How to Buy Bitcoin, But Realize It Could Be One Giant Bubble
- Trump's New Tax Plan Could Cost Citigroup $20 Billion
- Morgan Stanley Fires Former Congressman Harold Ford Jr.
- Al Franken Will Resign Over Sexual Misconduct Allegations - His Full Resignation Speech
- Ex-NFL Player Gets 40 Years for Running $10Mn Fraud
- Bitcoin Blows Past $15K, Adding $2K in Under 12 Hours
- Financial Adviser Settles Charges for Defrauding Private Equity Fund Investors
- New Cross Market Equity Supervision Report Cards - FINRA Phone-In Workshop, WebEx Presentation
- Mueller Just Crossed Trump's Red Line, With Deutsche Bank Subpoena
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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.