NYSE Volume Cut in Half in Three Years

NYSE Euronext said its dive in trading volume has deepened, in both stocks and derivatives.

Globally, its average daily volume in derivatives contracts was 7.0 million in February, down 21.4 percent from a year ago. Europe was down 35.7 percent and U.S. equity options down 9.2 percent.

The operator of the New York Stock Exchange, NYSE Arca and NYSE Amex said its trading in stocks in the United States was down 21.0 percent from a year ago.

In Tape A, which tracks trading of stocks listed with the NYSE, its market share and trading volume is down pointedly.

In the past year, its market share in matched orders on Tape A has fallen 4.5 percent, from 34.5 percent to 30.0 percent.

Most notably, the number of shares that it traded in the month of February in NYSE-listed stocks fell below the level of activity of 2004 – and is half what it was three years ago, when the credit crisis roiled financial markets.

Activity in NYSE’s “group share” of NYSE-listed stocks was 23.7 billion shares in February 2012.

That compares to 29.3 billion a year ago, 32.7 billion two years ago and … 50.3 billion in February 2009.

February 2009 was the month when, among other things, President Obama signed into law the "American Recovery and Reinvestment Act of 2009", which included a variety of spending measures and tax cuts intended to promote economic recovery. The U.S. Treasury Department, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, Office of Thrift Supervision, and the Federal Reserve Board issue a joint statement that the U.S. government stands firmly behind the banking system, And the U.S. Treasury Department announced its willingness to convert up to $25 billion of Citigroup preferred stock issued under the Capital Purchase Program into common equity.

The 23.7 billion shares in February 2012 compares to 28.2 billion in February 2004, according to statistics kept by NYSE Euronext on nyxdata.com.

In a given day, NYSE Euronext handled 1.8 billion shares of all listed stocks in the United States in February. That was down 21 percent from a year ago and 2.2 percent from January.

The exchange operator and technology supplier also said its European stock trading showed a decrease of 8.7 percent from a year ago, to 1.6 million transactions a day in February. But that was up 7.1 percent from January.

Its European derivatives products daily volume of 2.8 million contracts was down 35.7 percent from last year and 11.9 percent from last month.

Tom Steinert-Threlkeld writes for Securities Technology Monitor.