The NYSE Trading floor partially re-opened on Tuesday, May 26, allowing Floor Brokers an opportunity to resume their business operations (with reduced headcount and restrictions in place to enforce social distancing and other safety protocols).
Floor Brokers have fueled the success of the NYSE Closing Auction, resulting in unrivaled liquidity and execution quality. Investors have swiftly resumed trading with Floor Brokers: D Orders, a flexible order type available only via the Floor, accounted for 30% of total Closing Auction volume on May 27.
As auctions once again include this valuable source of liquidity, we have seen improvement in auction execution quality. NYSE Closing Auctions regularly price stocks near their end-of-day volume-weighted average trading price, and the percentage of Closing Auctions doing so have gone up even further this week with the return of Floor Brokers.
NYSE’s Opening Auction quality has also seen an uptick this week, with the return of the Floor. Given the first minutes of trading after the open are usually the most volatile time of day, auction quality can be measured by how closely the open price tracks in line with subsequent trading. NYSE consistently excels at open pricing, and the Floor’s return has only improved this metric.
The Trading Floor is quickly resuming its critical function in the NYSE Market Model. This will help improve market quality and liquidity, particularly during critical trading events such as the MSCI index rebalances this Friday, May 29.
Following the record-setting 40.1 million average daily volume (ADV) in the 1st quarter of this year, Q2 2021 options volume was the 2nd highest of all-time with 37.6 million contracts traded per day. Robust volume was driven in part by market anticipation of a potential earlier rise in interest rates and Fed tapering, as well as increased volume in options on new issues and continued activity in retail-focused stocks.
After-hours trading has been a larger piece of the total trading volume since the onset of the pandemic, with retail presence growing stronger and earnings announcements becoming less of a factor. In this post, we examine the impact of these shifting dynamics on after-hours price discovery and order behavior.
The surge in market volatility and trading volumes since the onset of the pandemic in March 2020 has impacted numerous aspects of equity market trading. One less-studied area has been after-hours trading. After-hours has also seen changes in order flow trends and influences, and here we examine trends and shifts occurring in these sessions.