Trading Volume Picks Up—With a Grain of Salt

Volume picks up, but careful how you interpret the numbers. Traders have been MISERABLE, even as major indices have moved to new highs, because volatility and volume have been so low.

They've been a little happier recently. Volume began picking up with the start of earnings season last week. How much? We have rarely crossed 5 billion shares on the consolidated NYSE tape (this is the sum of ALL trading in NYSE stocks, whether the trades were posted at the NYSE, Arca, Nasdaq, or anywhere else) in the past several months.

But last Thursday, we passed 6 billion shares. On Friday, 8.4 billion. Yesterday, 6.8 billion. These are big numbers.

But look under the hood: Citigroup is responsible for the majority of the increase.

Prior to the middle of last week, Citi traded roughly 300-500 million shares a day. But on Wednesday, the day JPMorgan reported earnings, Citi traded 1 billion, twice normal volume. Thursday: 1.5 billion. Friday: 1.8 billion. Monday, the day it reported earnings: 1.8 billion.

In other words, the three trading days from Thursday through Monday Citi traded over a billion shares above its recent average trading day. That is most of the difference from 5 billion to 6 billion on the consolidated tape.

Citi simply dominated the tape on those days. In the last couple months, Citi has been anywhere from 5 to 10 percent of total trading on the consolidated tape. But on Thursday it was 24 percent of all trading! On Friday, 20 percent. Yesterday, 26 percent!

What about the 8.4 billion shares that was done on Friday? That was the day of the Goldman bombshell, when volumes in financials went through the roof. Goldman alone did over 100 million shares that day.

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