Recent figures just released show that 55.7% of Wall Street's trading volume is program trading. Program trading is the simultaneous purchase or sale of at least 15 different stocks with a total value of $1 million or more.
This figure has been growing steadily over the last few years and was around 40% 18 months ago. We wouldn't be surprised if it gets to 75% within 5 years which seems crazy.
41% of the 55.7% share was done by the large investment banks for their own accounts. It seems they are slowly metamorphosing into giant speculation machines, basically just pure hedge funds with small pieces of traditional business on the side to help out with the bills.
One can now argue that the investment funds and certainly the little guy are getting to be more and more irrelevant. Or they're just there to provide some liquidity for the machines to get their teeth into.
We only have one comment on all of this - hope the machines don't get their wires crossed......
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