Volume Discount


NYSE trading volumes were up between 20 – 25 percent for June compared to prior Junes. Is the axiom: Sell in May and go away, finished?

The short answer: No

This volume up tick is based on high-frequency trading by certain firms. Early numbers showed 2 percent of firms are employing this trading scheme, yet the trades account for almost 85 percent of trading volume on certain days.

So the individual investor may have gone away, but trading desks are using this downtick in liquidity to manipulate the markets.

Black box or quant trading, which allows firms to get in and out of stock in less than a second with a penny of two profit, combined with proprietary sniffing programs, which sees trades before they hit the exchanges, allow even larger trading profits.

Given these new ploys the generate profits for certain firms, which released record trading earnings, how much of the current run ups in the markets can be taken seriously.

If day traders become the new buy and hold participants in market because they don’t sell till three o’clock then we are in big trouble.

For more on Wall and Washington and the economy see: https://mgray12.wordpress.com


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s