News, analysis and personal reflections on the markets & the financial sector

Friday, May 23, 2008

NYSE Trading Tanks

Just as the news hits today that the London Stock Exchange is sending up distress signals, we hear that trading at the Big Board, likewise, has plummeted to its lowest level since 2001, thanks to alternative venues capturing market its share. More about what’s going on with these erstwhile "pillars" of the global marketplace – and where all the liquidity is heading.

Trading on the New York Stock Exchange fell 26 percent this quarter to the lowest since 2001 as alternative venues captured market share and the total volume of U.S. equities climbed.

The shares changing hands each day on the 216-year-old exchange fell to an average 1.27 billion in the second quarter from 1.57 billion a year ago, according to NYSE data compiled by Bloomberg. Total trading rose 19 percent from a year ago to an average of 6.84 billion shares a day, as companies such as Bats Trading Inc. and Direct Edge ECN LLC won more of the business, Bloomberg data show.

The NYSE's share of the total value traded slipped to 52 percent in the first three months from more than 70 percent in 1990, according to data from the World Federation of Exchanges. Analysts who depend on volume to help forecast the market's direction are losing one of their tools.

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