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Stories of Interest
- This Family Bet It All on Bitcoin
- Clearinghouses Pass CFTC Liquidity Stress Tests
- President Trump Admits He’s Trying to Kill Obamacare. That’s Illegal.
- Trump Plunges Down List of ‘America’s Richest’
- Is Trump’s “Foreclosure King” in Over His Head?
- FBI Arrests NCAA Basketball Coaches and Adidas Rep in Bribery Probe Involving Recruitment
- Equifax CEO Steps Down Amid Hacking Scandal
- Litigation Costs to Rub Salt in RBS Investor Wounds
- RIAs Poised to Land Wirehouse Recruits - Dan Jamieson
- Citibank and U.K. Affiliate to Pay $550K Penalty for Swap Data Reporting Violations - CFTC
- AIG to Restructure into 3 New Units, Marking CEO's First Big Move
- Accounting Firm Deloitte Says It Suffered Cyberattack (subsc reqd)
- Upcoming FINRA Board Meeting and FINRA360 Update
- Elizabeth Warren Lifts Hold on Trump DOJ Antitrust Nominee
- Bigger Mergers Narrow Indy Reps' Options, Alter IBD Channel - Dan Jamieson
- Dentons to Merge with U.K.'s Murray & Spens
- BigLaw Hogan Lovells Announces Hundreds of Buyouts, Layoffs - Almost 500 Affected
- Faith-Based Advisor Censured for Selling Class A Shares to Clergy
- After FINRA Bar, CFP Board Suspends Texas Advisor
- iCapital Network to Acquire U.S. Private Equity Access Fund Platform from Deutsche Bank
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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.